IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v196y2020ics0360544220302826.html
   My bibliography  Save this article

Seasonal variability of price elasticity of demand of households using zonal tariffs and its impact on hourly load of the power system

Author

Listed:
  • Andruszkiewicz, Jerzy
  • Lorenc, Józef
  • Weychan, Agnieszka

Abstract

Price elasticity of electricity demand values are crucial for a proper design or retrofit of time-of-use electricity tariffs. The aim of this paper was to propose an alternative methodology for determination of self and cross price elasticity of demand with daily resolution for electricity customers changing their settlement to the time-of-use tariff. Progressing implementation of smart metering systems provides access to more accurate data reflecting the consumers’ electricity consumption with at least hourly resolution, which has been a motivation to use load profiles data to analyze customer’s price elasticity. The method is based on load profiles’ comparison of customers using flat and time-of-use tariffs. A case-study example is presented for residential consumers settled according to time-of-use tariff in the area of one of Polish distribution system operators and the resulting price elasticity values vary significantly over the year. Effectiveness of zonal tariffs is also evaluated, along with their impact on the power system’s load in the summer and winter peak load periods. The results may be used by supply companies and distribution system operators to improve efficiency of applied demand response programs based on time-of-use tariffs and thus influence the safety of the power system operation.

Suggested Citation

  • Andruszkiewicz, Jerzy & Lorenc, Józef & Weychan, Agnieszka, 2020. "Seasonal variability of price elasticity of demand of households using zonal tariffs and its impact on hourly load of the power system," Energy, Elsevier, vol. 196(C).
    • Handle: RePEc:eee:energy:v:196:y:2020:i:c:s0360544220302826
    DOI: 10.1016/j.energy.2020.117175
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544220302826
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2020.117175?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Labandeira, Xavier & Labeaga, José M. & López-Otero, Xiral, 2017. "A meta-analysis on the price elasticity of energy demand," Energy Policy, Elsevier, vol. 102(C), pages 549-568.
    2. Thorsnes, Paul & Williams, John & Lawson, Rob, 2012. "Consumer responses to time varying prices for electricity," Energy Policy, Elsevier, vol. 49(C), pages 552-561.
    3. Benjamin Volland & Ivan Tilov, 2018. "Price elasticities of electricity demand in Switzerland: Results from a household panel," IRENE Working Papers 18-03, IRENE Institute of Economic Research.
    4. Silva, Susana & Soares, Isabel & Pinho, Carlos, 2018. "Electricity residential demand elasticities: Urban versus rural areas in Portugal," Energy, Elsevier, vol. 144(C), pages 627-632.
    5. Fan, Shu & Hyndman, Rob J., 2011. "The price elasticity of electricity demand in South Australia," Energy Policy, Elsevier, vol. 39(6), pages 3709-3719, June.
    6. Woo, C.K. & Liu, Y. & Zarnikau, J. & Shiu, A. & Luo, X. & Kahrl, F., 2018. "Price elasticities of retail energy demands in the United States: New evidence from a panel of monthly data for 2001–2016," Applied Energy, Elsevier, vol. 222(C), pages 460-474.
    7. Cosmo, Valeria Di & O’Hora, Denis, 2017. "Nudging electricity consumption using TOU pricing and feedback: evidence from Irish households," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 1-14.
    8. Venizelou, Venizelos & Philippou, Nikolas & Hadjipanayi, Maria & Makrides, George & Efthymiou, Venizelos & Georghiou, George E., 2018. "Development of a novel time-of-use tariff algorithm for residential prosumer price-based demand side management," Energy, Elsevier, vol. 142(C), pages 633-646.
    9. Espey, James A. & Espey, Molly, 2004. "Turning on the Lights: A Meta-Analysis of Residential Electricity Demand Elasticities," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 36(1), pages 65-81, April.
    10. Chassin, David P. & Rondeau, Daniel, 2016. "Aggregate modeling of fast-acting demand response and control under real-time pricing," Applied Energy, Elsevier, vol. 181(C), pages 288-298.
    11. Massimo, Filippini, 2011. "Short- and long-run time-of-use price elasticities in Swiss residential electricity demand," Energy Policy, Elsevier, vol. 39(10), pages 5811-5817, October.
    12. Faruqui, Ahmad & Malko, J.Robert, 1983. "The residential demand for electricity by time-of-use: A survey of twelve experiments with peak load pricing," Energy, Elsevier, vol. 8(10), pages 781-795.
    13. Y, Kiguchi & Y, Heo & M, Weeks & R, Choudhary, 2019. "Predicting intra-day load profiles under time-of-use tariffs using smart meter data," Energy, Elsevier, vol. 173(C), pages 959-970.
    14. Matar, Walid, 2018. "Households' response to changes in electricity pricing schemes: Bridging microeconomic and engineering principles," Energy Economics, Elsevier, vol. 75(C), pages 300-308.
    15. Gautam, Tej K. & Paudel, Krishna P., 2018. "Estimating sectoral demands for electricity using the pooled mean group method," Applied Energy, Elsevier, vol. 231(C), pages 54-67.
    16. Torriti, Jacopo, 2012. "Price-based demand side management: Assessing the impacts of time-of-use tariffs on residential electricity demand and peak shifting in Northern Italy," Energy, Elsevier, vol. 44(1), pages 576-583.
    17. Schulte, Isabella & Heindl, Peter, 2017. "Price and income elasticities of residential energy demand in Germany," Energy Policy, Elsevier, vol. 102(C), pages 512-528.
    18. Najafzad, Hamid & Davari-Ardakani, Hamed & Nemati-Lafmejani, Reza, 2019. "Multi-skill project scheduling problem under time-of-use electricity tariffs and shift differential payments," Energy, Elsevier, vol. 168(C), pages 619-636.
    19. Yan, Xing & Ozturk, Yusuf & Hu, Zechun & Song, Yonghua, 2018. "A review on price-driven residential demand response," Renewable and Sustainable Energy Reviews, Elsevier, vol. 96(C), pages 411-419.
    20. Sonnino, T., 1979. "On the use of energy elasticities," Energy, Elsevier, vol. 4(6), pages 1063-1067.
    21. Gottwalt, Sebastian & Ketter, Wolfgang & Block, Carsten & Collins, John & Weinhardt, Christof, 2011. "Demand side management—A simulation of household behavior under variable prices," Energy Policy, Elsevier, vol. 39(12), pages 8163-8174.
    22. Pielow, Amy & Sioshansi, Ramteen & Roberts, Matthew C., 2012. "Modeling short-run electricity demand with long-term growth rates and consumer price elasticity in commercial and industrial sectors," Energy, Elsevier, vol. 46(1), pages 533-540.
    23. Bergaentzlé, Claire & Jensen, Ida Græsted & Skytte, Klaus & Olsen, Ole Jess, 2019. "Electricity grid tariffs as a tool for flexible energy systems: A Danish case study," Energy Policy, Elsevier, vol. 126(C), pages 12-21.
    24. Tiwari, Aviral Kumar & Menegaki, Angeliki N., 2019. "A time varying approach on the price elasticity of electricity in India during 1975–2013," Energy, Elsevier, vol. 183(C), pages 385-397.
    25. Huq, Md.Shamsul & Dynes, J.Graham, 1982. "The price elasticity of the residential demand for electricity in the Vepco service area," Energy, Elsevier, vol. 7(10), pages 829-837.
    26. Sharifi, R. & Fathi, S.H. & Vahidinasab, V., 2017. "A review on Demand-side tools in electricity market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 565-572.
    27. Arisoy, Ibrahim & Ozturk, Ilhan, 2014. "Estimating industrial and residential electricity demand in Turkey: A time varying parameter approach," Energy, Elsevier, vol. 66(C), pages 959-964.
    28. Kirkerud, Jon Gustav & Trømborg, Erik & Bolkesjø, Torjus Folsland, 2016. "Impacts of electricity grid tariffs on flexible use of electricity to heat generation," Energy, Elsevier, vol. 115(P3), pages 1679-1687.
    29. Aalami, H.A. & Moghaddam, M. Parsa & Yousefi, G.R., 2010. "Demand response modeling considering Interruptible/Curtailable loads and capacity market programs," Applied Energy, Elsevier, vol. 87(1), pages 243-250, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alvarez, Gonzalo E., 2021. "A multi-objective formulation of improving flexibility in the operation of electric power systems: Application to mitigation measures during the coronavirus pandemic," Energy, Elsevier, vol. 227(C).
    2. Krzysztof Łowczowski & Jacek Roman, 2023. "Techno-Economic Analysis of Alternative PV Orientations in Poland by Rescaling Real PV Profiles," Energies, MDPI, vol. 16(17), pages 1-18, August.
    3. Sarkar, Biswajit & Seok, Hyesung & Jana, Tapas Kumar & Dey, Bikash Koli, 2023. "Is the system reliability profitable for retailing and consumer service of a dynamical system under cross-price elasticity of demand?," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    4. Kim, Jihyo & Lee, Soomin & Jang, Heesun, 2022. "Lessons from residential electricity demand analysis on the time of use pricing experiment in South Korea," Energy Economics, Elsevier, vol. 113(C).
    5. Tsao, Yu-Chung & Beyene, Tsehaye Dedimas & Thanh, Vo-Van & Gebeyehu, Sisay Geremew & Kuo, Tsai-Chi, 2022. "Power distribution network design considering the distributed generations and differential and dynamic pricing," Energy, Elsevier, vol. 241(C).
    6. Kim, Kyungah & Choi, Jihye & Lee, Jihee & Lee, Jongsu & Kim, Junghun, 2023. "Public preferences and increasing acceptance of time-varying electricity pricing for demand side management in South Korea," Energy Economics, Elsevier, vol. 119(C).
    7. Wang, Fei & Lu, Xiaoxing & Chang, Xiqiang & Cao, Xin & Yan, Siqing & Li, Kangping & Duić, Neven & Shafie-khah, Miadreza & Catalão, João P.S., 2022. "Household profile identification for behavioral demand response: A semi-supervised learning approach using smart meter data," Energy, Elsevier, vol. 238(PB).
    8. Jerzy Andruszkiewicz & Józef Lorenc & Agnieszka Weychan, 2021. "Price-Based Demand Side Response Programs and Their Effectiveness on the Example of TOU Electricity Tariff for Residential Consumers," Energies, MDPI, vol. 14(2), pages 1-21, January.
    9. Ruan, Jiaqi & Liu, Guolong & Qiu, Jing & Liang, Gaoqi & Zhao, Junhua & He, Binghao & Wen, Fushuan, 2022. "Time-varying price elasticity of demand estimation for demand-side smart dynamic pricing," Applied Energy, Elsevier, vol. 322(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jerzy Andruszkiewicz & Józef Lorenc & Agnieszka Weychan, 2019. "Demand Price Elasticity of Residential Electricity Consumers with Zonal Tariff Settlement Based on Their Load Profiles," Energies, MDPI, vol. 12(22), pages 1-22, November.
    2. Jerzy Andruszkiewicz & Józef Lorenc & Agnieszka Weychan, 2021. "Price-Based Demand Side Response Programs and Their Effectiveness on the Example of TOU Electricity Tariff for Residential Consumers," Energies, MDPI, vol. 14(2), pages 1-21, January.
    3. Li, Raymond & Woo, Chi-Keung & Cox, Kevin, 2021. "How price-responsive is residential retail electricity demand in the US?," Energy, Elsevier, vol. 232(C).
    4. Farrell, Niall, 2021. "The increasing cost of ignoring Coase: Inefficient electricity tariffs, welfare loss and welfare-reducing technological change," Energy Economics, Elsevier, vol. 97(C).
    5. Javier Bueno & Desiderio Romero-Jordán & Pablo del Río, 2020. "Analysing the Drivers of Electricity Demand in Spain after the Economic Crisis," Energies, MDPI, vol. 13(20), pages 1-18, October.
    6. Gautam, Tej K. & Paudel, Krishna P., 2018. "Estimating sectoral demands for electricity using the pooled mean group method," Applied Energy, Elsevier, vol. 231(C), pages 54-67.
    7. Wang, Yong & Li, Lin, 2015. "Time-of-use electricity pricing for industrial customers: A survey of U.S. utilities," Applied Energy, Elsevier, vol. 149(C), pages 89-103.
    8. Wang, Banban & Wei, Jie & Tan, Xiujie & Su, Bin, 2021. "The sectorally heterogeneous and time-varying price elasticities of energy demand in China," Energy Economics, Elsevier, vol. 102(C).
    9. Pellini, Elisabetta, 2021. "Estimating income and price elasticities of residential electricity demand with Autometrics," Energy Economics, Elsevier, vol. 101(C).
    10. Boßmann, Tobias & Eser, Eike Johannes, 2016. "Model-based assessment of demand-response measures—A comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1637-1656.
    11. Dorothée CHARLIER & Mouez FODHA & Djamel KIRAT, 2021. "CO2 Emissions from the Residential Sector in Europe: Some Insights form a Country-Level Assessment," LEO Working Papers / DR LEO 2849, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    12. Tilov, Ivan & Farsi, Mehdi & Volland, Benjamin, 2020. "From frugal Jane to wasteful John: A quantile regression analysis of Swiss households’ electricity demand," Energy Policy, Elsevier, vol. 138(C).
    13. Cao, K.H. & Qi, H.S. & Li, R. & Woo, C.K. & Tishler, A. & Zarnikau, J., 2023. "An experiment in own-price elasticity estimation for non-residential electricity demand in the U.S," Utilities Policy, Elsevier, vol. 81(C).
    14. Ivan Faiella & Luciano Lavecchia, 2021. "Households' energy demand and the effects of carbon pricing in Italy," Questioni di Economia e Finanza (Occasional Papers) 614, Bank of Italy, Economic Research and International Relations Area.
    15. Woo, C.K. & Liu, Y. & Zarnikau, J. & Shiu, A. & Luo, X. & Kahrl, F., 2018. "Price elasticities of retail energy demands in the United States: New evidence from a panel of monthly data for 2001–2016," Applied Energy, Elsevier, vol. 222(C), pages 460-474.
    16. Carlos Enrique Carrasco-Gutierrez & Philipp Ehrl, 2023. "Regional Estimates of Residential Electricity Demand in Brazil," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 465-476, January.
    17. Woo, C.K. & Li, R. & Shiu, A. & Horowitz, I., 2013. "Residential winter kWh responsiveness under optional time-varying pricing in British Columbia," Applied Energy, Elsevier, vol. 108(C), pages 288-297.
    18. Mohseni, Soheil & Brent, Alan C. & Kelly, Scott & Browne, Will N., 2022. "Demand response-integrated investment and operational planning of renewable and sustainable energy systems considering forecast uncertainties: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    19. L. (Lisa B.) Ryan & Sarah La Monaca & Linda Mastrandrea & Petr Spodniak, 2018. "Harnessing Electricity Retail Tariffs to Support Climate Change Policy," Working Papers 201822, School of Economics, University College Dublin.
    20. Venizelou, Venizelos & Philippou, Nikolas & Hadjipanayi, Maria & Makrides, George & Efthymiou, Venizelos & Georghiou, George E., 2018. "Development of a novel time-of-use tariff algorithm for residential prosumer price-based demand side management," Energy, Elsevier, vol. 142(C), pages 633-646.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:196:y:2020:i:c:s0360544220302826. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.