Demand Price Elasticity of Residential Electricity Consumers with Zonal Tariff Settlement Based on Their Load Profiles

Abstract

The concept of price elasticity of demand has been widely used for the assessment of the consumers’ behavior in the electricity market. As the residential consumers represent a significant percentage of the total load, price elasticity of their demand may be used to design desirable demand side response programs in order to manage peak load in a power system. The method presented in this study proposes an alternative approach towards price elasticity determination for zonal tariff users, based on comparisons of load profiles of consumers settled according to flat and time-of-use electricity tariffs. A detailed explanation of the proposed method is presented, followed by a case-study of price elasticity determination for residential electricity consumers in Poland. The forecasted values of price elasticity of demand for the Polish households using time-of-use (TOU) tariff vary between −1.7 and −2.3, depending on the consumers’ annual electricity consumption. Moreover, an efficiency study of residential zonal tariff is performed to assess the operation of currently applicable electricity tariffs. Presented analysis is based on load profiles published by Distribution System Operators and statistical data, but the method can be applied to the real-life measurements from the smart metering systems as well when such systems are accessible for residential consumers.

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Estimation of Demand System for Household Energy Consumption: Empirical Evidence From Indonesia

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“…Whereas the short-term price elasticity of electricity demand has historically been very low, a number of newer research papers find significant elasticities in some power markets. The reference Andruszkiewicz et al (2019) provides a survey of shortterm elasticities found in the academic literature, with annual values below −0.5 for Switzerland, Portugal, US and China. Also, the authors argue that elasticities are likely to increase with the introduction of smart metering and time-of-use tariffs.…”