Household electricity demand in Latin America and the Caribbean: A meta-analysis of price elasticity

Studying the price elasticity of demand is essential when considering rate policies in the electricity sector. This research aims to perform a meta-analysis and a meta-regression of the price elasticity of electricity demand for the residential sector in Latin American and Caribbean countries. Results show that the true value of the short-term price elasticity is between −0.197 and −0.468 and, for the long-term, is between −0.252 and −0.331. Findings differ substantially when studies are classified by their quality in econometric procedures. The long-term price elasticity seems to be lower than estimates found for other regions.     

Gas and electricity demand in Spanish manufacturing industries: An analysis using homogeneous and heterogeneous estimators

A comparative analysis of electricity and gas demand in the industrial sector over a long period of time appears to be absent in the literature. In fact, unlike electricity demand, natural gas demand in the industrial sector has not been well researched. Our paper aims to cover this gap. It analyses electricity and gas consumption patterns by the Spanish manufacturing sector, between 1995 and 2010. A novel and innovative quantitative approach based on, both, homogenous and heterogeneous estimators was used for this purpose. The results of the no-spurious estimations (the Augmented Mean Group Estimator) show that the price elasticity of gas demand is significantly negative and within the −0.44 to −0.48 range. In contrast, the price elasticity of electricity demand is not statistically significant. The income elasticities show the opposite pattern: those of natural gas are not statistically significant, whereas the income elasticities for electricity are statistically significant and within the 0.22 to 0.29 range. Compared to previous findings, our preferred estimation shows some variation regarding price elasticities of natural gas demand.     

Effect of electricity price reform on households’ electricity consumption in urban Ethiopia

Until recently, the price of electricity in Ethiopia was among the lowest in the world. Such low prices have contributed to a substantial financial deficit for the government-owned electric utility and led to a degradation in the quality of electricity services delivered to customers. In December 2018, the utility increased the electricity tariff to help to finance improvements in the quality of electricity services. This paper studies the effect of the revised tariff on urban household electricity consumption and alternative fuel expenditure. The study relied on two rounds of household survey data and six years of electricity consumption data from the utility company. The study finds that prepaid customers reduced their electricity consumption by about 22 kWh per month in the post-tariff-adjustment periods, equivalent to about 10% of electricity expenditure and 14% of daily consumption. In the overall sample, however, consumption slightly increased over time. These results imply that the price elasticity of demand for electricity in urban Ethiopia is highly inelastic. Moreover, households did not shift substantially toward the use of alternative fuels. The findings indicate that governments and utilities in settings where electricity is priced well below cost-covering levels may be able to increase revenues and improve their balance sheets with relatively modest effects on households’ electricity consumption, though effects from more substantial tariff hikes should be examined.     

An integrated model for electricity market coupling simulations: Evidence from the European power market crossroad

Motivated by the project of European Power Exchanges to develop a single price-coupling solution to calculate electricity prices across Europe that respects the cross-border capacity constraints on a day-ahead basis, we empirically examine and quantify market inefficiencies in non-coupled day-ahead electricity markets. These result from inefficient cross-border capacity allocation and its underlying effect on the market clearing prices. Efficient cross-border capacity allocation and new market clearing prices are simulated using a social welfare maximisation algorithm for the capacity of relevant network elements, whereas the order book generation process is reproduced by the econometrically estimated supply price elasticity functions. The estimated vector autoregression model and the underlying impulse response functions examine price shock transmission under different market regimes. The market coupling process is simulated on the historical non-coupled day-ahead market realisations at the junction of three regional power markets: Central Western Europe, Northern Italian, and South Eastern European markets. Simulation results confirm steady, efficient cross-border capacity utilisation, reduced price variance, improved overall price convergence and amplified price shock transmission in coupled electricity markets. Furthermore, in the simulated period, we have estimated an increase in the overall suppliers' and consumers’ surplus of almost EUR 16 million. The proposed simulation framework is a clear choice for applied simulation in coupled day-ahead electricity markets, offering valuable visual insights into the cross-border capacity allocation and its implications on electricity prices.     

Heterogeneity in own-price residential customer demand elasticities for electricity under time-of-use rates: Evidence from a randomized-control trial in the United States

Regulators, policymakers, and stakeholders in several states have raised concerns about the price elasticity of residential customers’ electricity demand, especially as related to different customer subpopulations, management of critical end-uses, and enrollment approaches. This analysis sought to quantify the diversity of residential customer price elasticity in a time-of-use rate across these different dimensions using data generated from a utility pricing experiment. Customers were found to be more elastic during the peak period of critical peak days, who were predicted to own and use air conditioning, and who volunteered for time-of-use (TOU) rates (but those defaulted on were 25% as elastic).     

The impact of the integration of renewable energy sources in the electricity price formation: is the Merit-Order Effect occurring in Portugal?

This study investigates the relationship between wholesale electricity price behaviour and the integration of new renewable energy sources in the electricity system in Portugal. The research analyses two different samples, namely: the significant deployment of wind power versus the abrupt increase in the installed capacity of solar photovoltaic. Daily data from 2011 until 2019 and, a SARMAX/EGARCH approach has been conducted to assess the merit-order effect. The main results suggest that electricity production from wind power is decreasing the price of electricity but increasing its volatility. In addition, there is evidence for the leverage effect in electricity price.     

Customer response to day-ahead market hourly pricing: Choices and performance

Real-time pricing (RTP) has been advocated to address extreme price volatility and market power in electricity markets. This study of Niagara Mohawk Power Corporation's largest customers analyzes their choices and performance in response to day-ahead, default-service RTP. Overall price response is modest: 119 customers are estimated to reduce their peak demand by about 10% at high prices. Manufacturing customers are most responsive with a price elasticity of 0.16, followed by government/education customers (0.11), while commercial/retail, healthcare and public works customers are, at present, relatively unresponsive. Within market segments, individual customer response varies significantly.     

Price and income elasticities of residential electricity demand in Brazil and policy implications

The research objective was to estimate Brazil's residential electricity consumption behavior, given alterations in price and income. A balanced panel with monthly data was used for the 27 states of the country between 2004 and 2019, distributed into the five regions of Brazil. This approach enabled the calculation of price elasticity and income parameters, in the short and long terms, for both national and regional scenarios. They were used, as control variables, the average temperature, which was not used in previous research due to the use of a database with a higher level of aggregation, and the rainfall, that can be considered an important parameter in the Brazilian case where most of the electricity is obtained from hydroelectric generation, however, it has never been used in previous studies. The econometric model was estimated using the Generalized Method of Moments (GMM), version System - GMM (SY - GMM), to avoid dynamic bias of the panel and a serial correlation problem, which has not been considered in previous studies in Brazil. The results show that, although the short and long-term elasticities for the national scenario are similar to previous studies when analyzed regionally, the parameters proved to be quite different from previous research. Based on the results, adjustments were proposed for the Brazilian electricity price policy.     

Asymmetric price response of industrial electricity demand in India

This paper analyses the asymmetric effects of electricity prices on industrial electricity demand in India from 1981 to 2016 using the two-threshold nonlinear autoregressive distributed lag (NARDL) model. The results show that customers react more strongly to a large price cut than a large price increase, whereas a small price change does not affect electricity consumption. A large price decrease, which raises the quantity demanded by a higher percentage, makes it more challenging to reach net-zero emissions as electricity generation relies mainly on fossil fuels. Since demand is inelastic for price increases, a large price hike minimally reduces electricity consumption.     

天然气分布式能源系统高效性、经济性评价

结合工程实例,对天然气分布式能源系统的高效性(评价指标为节能率)进行评价,对经济性的影响因素进行分析。经济性指标为静态投资回收期,影响因素:单因素:项目总投资额、天然气价格、运行时间、售电价格、售冷价格;双因素:单位发电功率投资额+电气比(售电价格与天然气价格比)、单位发电功率投资额+冷气比(售冷价格与天然气价格比)。运行时间、售电价格、售冷价格对静态投资回收期的影响一致,随着运行时间、售电价格、售冷价格的延长和增大,静态投资回收期缩短,3个因素的影响显著性依次减弱。天然气价格、项目总投资额对静态投资回收期的影响一致,随着天然气价格、项目总投资额的增大,静态投资回收期延长,天然气价格的影响更.显著。单位发电功率投资额一定时,静态投资回收期随电气比的增大而缩短。电气比一定时,静态投资回收期随单位发电功率投资额的减小而缩短。单位发电功率投资额越小,电气比越大,静态投资回收期越短。单位发电功率投资额一定时,静态投资回收期随冷气比的增大而缩短。冷气比一定时,静态投资回收期随单位发电功率投资额的减小而缩短。单位发电功率投资额越小,冷气比越大,静态投资回收期越短。     

Electricity price forecasting using neural networks with an improved iterative training algorithm

In a competitive electricity market, the forecasting of energy prices is an important activity for all market participants either for developing bidding strategies or for making investment decisions. In this article, a new forecasting strategy is proposed for short-term prediction of the electricity price, which is a complex quantity with nonlinear, volatile and time-dependent behaviour. Our forecast strategy includes two novelties: a new two-stage feature selection algorithm and a new iterative training algorithm. The feature selection algorithm has two filtering stages to remove irrelevant and redundant candidate inputs, respectively. This algorithm is based on mutual information and correlation analysis. The improved iterative training algorithm is composed of two neural networks in which the output of the first neural network is one of the inputs to the second. The overall proposed strategy is applied to the Pennsylvania–New Jersey–Maryland (PJM) electricity markets and compared with some of the most recent price forecast methods.     

European Union emissions trading scheme impact on the Spanish electricity price during phase II and phase III implementation

The European Union Emissions Trading Scheme (EU ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively. The purpose of the present work is to evaluate the influence of CO₂ opportunity cost on the Spanish wholesale electricity price. Our sample includes all Phase II of the EU ETS and the first year of Phase III implementation, from January 2008 to December 2013. A vector error correction model (VECM) is applied to estimate not only long-run equilibrium relations, but also short-run interactions between the electricity price and the fuel (natural gas and coal) and carbon prices. The four commodities prices are modeled as joint endogenous variables with air temperature and renewable energy as exogenous variables. We found a long-run relationship (cointegration) between electricity price, carbon price, and fuel prices. By estimating the dynamic pass-through of carbon price into electricity price for different periods of our sample, it is possible to observe the weakening of the link between carbon and electricity prices as a result from the collapse on CO₂ prices, therefore compromising the efficacy of the system to reach proposed environmental goals. This conclusion is in line with the need to shape new policies within the framework of the EU ETS that prevent excessive low prices for carbon over extended periods of time.     

Decision-making framework for supplying electricity from distributed generation-owning retailers to price-sensitive customers

In this paper, a robust bi-level decision-making framework is presented for distributed generation (DG) owning retailers to supply the electricity to price-sensitive customers. Uncertainties about client demand and wholesale prices are the main difficulties faced by the electricity retailer. Clients can adjust their consumption according to the retailer's selling price. A higher selling price increases retailers' profit but decreases client consumption. Hence, the retailer faces a tradeoff between the price and sales. In the proposed model, the optimal selling price and the retailer's energy-supply strategy are modeled in the lower sub-problem. According to the proposed selling price, the optimal energy consumption of price-sensitive clients is determined in the upper sub-problem. To evaluate the financial risk arising from uncertain prices, the Information Gap Decision Theory (IGDT) approach is addressed in the lower sub-problem. Additionally, the risk-based optimization problem is formulated for risk-averse and risk-taker retailers via the robustness and opportunity functions, respectively. The robustness of the optimal solution against price variations is evaluated such that the associated profit will be more than the electricity retailer's acceptable threshold. The efficiency and performance of the decision-making framework are analyzed via a case study, and the numerical results are discussed.     

Poverty and environmental impacts of electricity price reforms in Montenegro

The creation of the Energy Community of South Eastern Europe in 2005 committed countries in South Eastern Europe to liberalize their energy markets in accordance to EU regulations. The Government of Montenegro is thus in the process of reforming its energy sector, which includes an electricity tariff reform. This paper analyzes the environmental and social impacts of an increase in residential electricity tariffs contemplated – which is expected to range anywhere from 40 to over 100% increase. As this analysis shows, such a significant price rise will impose a heavy burden on the poor households and it may adversely affect the environment. In an ex ante investigation of the welfare impact of this price increase on households in Montenegro, we show that the anticipated price increase will result in a very significant increase in households' energy expenditures. A simulation of alternative policy measures analyzes the impact of different tariff levels and structures, focusing on the poor and vulnerable households. Higher electricity prices could also significantly increase the proportion of households using fuelwood for space heating. Thus the level of fuelwood consumption should be carefully monitored under the electricity tariff reforms and the Government of Montenegro should combine the tariff reforms with a carefully evaluated set of policy measures to mitigate the effect of the electricity price increase on the poor.     

天然气供热供冷的技术经济分析

对冬季采用天然气热水锅炉供热，夏季采用电动离心式冷水机组供冷和冬夏季都采用天然气直燃型溴化锂吸收式冷热水机组进行供热供冷的两种方案进行了技术经济比较。指出天然气价和电价是影响供热供冷成本的最敏感因素。     

The impact of gasoline prices on urban bus ridership

This article examines the gasoline price elasticity of ridership on a city transit system. Multiple regression models are developed to explain variations in ridership due to changes in gasoline prices, bus system size, and other variables. The estimated gasoline price elasticity of bus ridership is. 3, which is very strong statistically. This provides insight into the possible relationship between future federal energy policies which will influence future gasoline prices and urban transportation modal choices.     

The impact of renewable energy on household electricity prices in liberalized electricity markets: A cross-national panel data analysis

The main research questions addressed in this paper are: first, have electricity market reforms achieved lower household electricity prices and, second, has the introduction of renewable energy increased household electricity prices in deregulated markets Answers to the questions were derived using static and dynamic panel data analysis from 1991 to 2014 employing explanatory variables such as the extent of electricity market reform and the share of generation from renewable energy resources. The dynamic model suggests that a lower household electricity price is associated with the degree of electricity market reform, while the share of renewable energy in electricity generation is not statistically significant.     

Consumer price effects of deregulated electric generation markets: The case of Ohio and the midwestern United States

This study investigates the effects of electric utility restructuring on (a) the cost of generated electricity, (b) increases in the regulated portions of customers' bills, and (c) changes in customers’ average total electricity price in restructured states relative to similar states that remained regulated. The results across the tests indicate that restructured generation markets benefited consumers through lower price growth or price declines. However, in Ohio, increases in charges authorized by regulators offset savings from competitive wholesale generation markets.     

Optimal control of a commercial building's thermostatic load for off-peak demand response

This paper studies the optimal control of a commercial building's thermostatic load during off-peak hours as an ancillary service to the power grid. It provides an algorithmic framework that commercial buildings can implement to cost-effectively increase their electricity demand at night while they are unoccupied, instead of using standard inflexible setpoint control. Consequently, there is minimal or no impact on user comfort, while the building manager gains an additional income stream from providing the ancillary service. By introducing a novel benefit-cost ratio of ancillary service payment to night-time price of electricity, we are able to study the building's capability to provide a service that is both useful to the power grid and profitable to the building manager. Numerical results show that there can be an economic incentive to participate even if the payment rate for the ancillary service is less than the price of electricity.     

燃气空调对缓解北京地区电力紧张的作用

讨论了近年来北京地区夏季持续高温引起的空调用电负荷对电网的影响，提出使用燃气空调缓解电力紧张的方法，分析了燃气空调市场发展的有利因素，对燃气空调与电力空调的经济性及环保性进行了比较。提出调整燃气价格，鼓励用户夏季使用燃气空调是缓解北京地区电力紧张的有效措施。