Factoring the elasticity of demand in electricity prices

Author

Kirschen, Daniel S. ; Strbac, Goran ; Cumperayot, Pariya ; De Paiva Mendes, Dilemar

Author_Institution

Univ. of Manchester Inst. of Sci. & Technol., UK

Volume

15

Issue

2

fYear

2000

fDate

5/1/2000 12:00:00 AM

Firstpage

612

Lastpage

617

Abstract

As electricity markets are liberalized, consumers become exposed to more volatile electricity prices and may decide to modify the profile of their demand to reduce their electricity costs. This paper analyzes the effect that the market structure can have on the elasticity of the demand for electricity. It then describes how the consumers´ behavior can be modeled using a matrix of self- and cross-elasticities. It is shown how these elasticities can be taken into consideration when scheduling generation and setting the price of electricity in a pool based electricity market. These concepts are illustrated using a 26-generator system

Keywords

costing; electricity supply industry; power generation scheduling; power system economics; 26-generator system; cross-elasticities; demand elasticity; electricity costs reduction; electricity markets liberalization; electricity prices; generation scheduling; market structure; pool based electricity market; self-elasticities; volatile electricity prices; Costs; Elasticity; Electricity supply industry; Energy consumption; Job shop scheduling; Material storage; Power generation; Power system economics; Pricing; Production;

fLanguage

English

Journal_Title

Power Systems, IEEE Transactions on

Publisher

ieee

ISSN

0885-8950

Type

jour

DOI

10.1109/59.867149

Filename

867149