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.
Highlights
Over the recent years, increasing problems with ensuring reliable and stable supply of energy in the global aspect may be observed due to rapidly increasing peak electricity demand and hindered development of generating units with sufficient peak capacities
Based on the presented model, a case-study of price elasticity of demand calculation was performed for the residential consumers located in the area of one of Polish distribution system operators (DSOs)
The standard load profiles published by DSOs in Poland for the purpose of hourly settlement of energy suppliers in the wholesale market were used to present the new methodology for determining price elasticity of demand
Summary
Over the recent years, increasing problems with ensuring reliable and stable supply of energy in the global aspect may be observed due to rapidly increasing peak electricity demand and hindered development of generating units with sufficient peak capacities. These problems generate growing interest in alternative ways of managing power systems, such as demand side response (DSR), because the electricity suppliers are given a choice between investing in new, costly peak capacities at generation side and using less risky means, related to load management, pay significant attention to using these less radical methods being more environmentally friendly as well. An appropriate electricity tariff design requires one to know the price elasticity of electricity demand of the considered consumers, which describes a possible change in the electricity demand as a result of electricity price change or other events, such as price change of different energy carriers, which may act as substitute for electricity, consumer’s change of income, etc. [2]
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