A Framework for Assessing Peak Demand Reduction from Air Conditioning Efficiency Programs in Developing Economies: A Case Study of Paraguay

This study examines the rapid growth of energy demand in Paraguay, primarily driven by intensive air conditioning use and reduced hydroelectric output due to adverse Paraná River conditions. Employing a Vector Autoregressive (VAR) model, we quantify how temperature shocks significantly elevate peak electricity demand within the National Interconnected System. Our findings reveal that air conditioning accounts for 34–36% of the peak demand, pushing the hydroelectric system towards its operational limits. To address this challenge, we propose a technological transition strategy focused on energy efficiency improvements and labeling programs aimed at reducing peak demand, delaying system saturation, and achieving substantial power savings. These measures offer a practical approach to climate adaptation while supporting Paraguay’s international commitments and Sustainable Development Goals (SGDs) 7 (affordable and clean energy) and 13 (climate action). This work represents the first pioneering effort in Paraguay to quantify the influence of the SIN’s AC at the national level. This research provides policymakers with an evidence-based framework for energy planning, marking a pioneering effort in Paraguay to quantify cooling loads and set actionable efficiency targets.