“…In this figure, the demand elasticity from 2016 to 2019 have shown almost typical patterns with maximum price spikes up to 60 ¥/kWh. However, in 2020, the demand versus wholesale price have spiked up to 250 ¥/kWh in considerable spots, which justified in our previous model [28] from supply curve perspective. However, this study has developed a special econometric to further explore the correlation between the wholesale electricity price and the demand using the supply quantity per technology as instrumental variables.…”
Section: Resultssupporting
confidence: 54%
“…To resolve the supply endogeneity in correlation to the demand with equilibrium points, two-stage least square estimators are employed, which estimate the national supply first using instrumental variables [28].…”
Estimating the electricity demand elasticity is the fundamental step in designing an efficient demand response program, which includes sophisticated mathematical optimization from the perspectives of consumer satisfaction, dynamic elasticities, supplier strategies, and energy authority policies. This study aims to estimate the static elasticity of electricity demand considering the Japanese wholesale market price and the amount of energy demand in the national grid. The study acquired the data of the Japanese regional grids in the form of supply and demand electricity quantities in GWh from the regional transmission and distribution utilities. The supply quantities are quantified based on the energy production technology, while the demand quantities are obtained in hourly intervals for the period of April 2016 to March 2022. The developed econometric employed the two-stage least square estimation method. From the results, the static electricity demand elasticity is found to be 0.14%, which is justified as the impact of raising the wholesale market price by one ¥/kWh that will affect the national demand quantity a by 0.14% drop, and vice versa.
“…In this figure, the demand elasticity from 2016 to 2019 have shown almost typical patterns with maximum price spikes up to 60 ¥/kWh. However, in 2020, the demand versus wholesale price have spiked up to 250 ¥/kWh in considerable spots, which justified in our previous model [28] from supply curve perspective. However, this study has developed a special econometric to further explore the correlation between the wholesale electricity price and the demand using the supply quantity per technology as instrumental variables.…”
Section: Resultssupporting
confidence: 54%
“…To resolve the supply endogeneity in correlation to the demand with equilibrium points, two-stage least square estimators are employed, which estimate the national supply first using instrumental variables [28].…”
Estimating the electricity demand elasticity is the fundamental step in designing an efficient demand response program, which includes sophisticated mathematical optimization from the perspectives of consumer satisfaction, dynamic elasticities, supplier strategies, and energy authority policies. This study aims to estimate the static elasticity of electricity demand considering the Japanese wholesale market price and the amount of energy demand in the national grid. The study acquired the data of the Japanese regional grids in the form of supply and demand electricity quantities in GWh from the regional transmission and distribution utilities. The supply quantities are quantified based on the energy production technology, while the demand quantities are obtained in hourly intervals for the period of April 2016 to March 2022. The developed econometric employed the two-stage least square estimation method. From the results, the static electricity demand elasticity is found to be 0.14%, which is justified as the impact of raising the wholesale market price by one ¥/kWh that will affect the national demand quantity a by 0.14% drop, and vice versa.
“…Sequentially, the use of regional interconnections is a costly solution that produces numerous regional supply and demand equilibriums that fragment the MCM, which causes spatiotemporal price volatility. 3 Figure 2 National topology of the electricity grid …”
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