Swiss residential demand for electricity by time-of-use

Abstract

In this study, we have examined the residential demand for electricity by time-of-day in Switzerland. For this purpose, a model of two log-linear stochastic equations for peak and off-peak electricity consumption was estimated employing aggregated data referring to four years and 40 cities. The empirical analysis has highlighted some of the characteristics of the Swiss residential electricity market. The estimated short-run own-price elasticities are −0.60 during the peak period and −0.79 during the off-peak period. Whereas in the long-run these values, as expected, are higher than in the short-run with a value of −0.71 during the peak period and −1.92 during the off-peak period. These elasticities show a high responsiveness of electricity consumption to changes in prices. Moreover, positive values of the cross-price elasticities show that peak and off-peak electricity are substitutes.