Advanced Search
MyIDEAS: Login to save this article or follow this journal

Estimating deficit probabilities with price-responsive demand in contract-based electricity markets

Contents:

Author Info

  • Galetovic, Alexander
  • Muñoz, Cristián M.
Registered author(s):

    Abstract

    Studies that estimate deficit probabilities in hydrothermal systems have generally ignored the response of demand to changing prices, in the belief that such response is largely irrelevant. We show that ignoring the response of demand to prices can lead to substantial over or under estimation of the probability of an energy deficit. To make our point we present an estimation of deficit probabilities in Chile's Central Interconnected System between 2006 and 2010. This period is characterized by tight supply, fast consumption growth and rising electricity prices. When the response of demand to rising prices is acknowledged, forecasted deficit probabilities and marginal costs are shown to be substantially lower.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6V2W-4TY8WF9-3/2/e91712dd2116c80ab94e1d2da151f71c
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 37 (2009)
    Issue (Month): 2 (February)
    Pages: 560-569

    as in new window
    Handle: RePEc:eee:enepol:v:37:y:2009:i:2:p:560-569

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Price elasticity Deficit Demand;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Ahn, Nam-sung & Niemeyer, Victor, 2007. "Modeling market power in Korea's emerging power market," Energy Policy, Elsevier, vol. 35(2), pages 899-906, February.
    2. Bernstein, Sebastian, 1988. "Competition, marginal cost tariffs and spot pricing in the Chilean electric power sector," Energy Policy, Elsevier, vol. 16(4), pages 369-377, August.
    3. Maddala, G S, et al, 1997. "Estimation of Short-Run and Long-Run Elasticities of Energy Demand from Panel Data Using Shrinkage Estimators," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(1), pages 90-100, January.
    4. Reiss, Peter C. & White, Matthew W., 2003. "Demand and Pricing in Electricity Markets: Evidence from San Diego During California's Energy Crisis," Research Papers 1829, Stanford University, Graduate School of Business.
    5. Peter C. Reiss & Matthew W. White, 2003. "Demand and Pricing in Electricity Markets: Evidence from San Diego During California's Energy Crisis," NBER Working Papers 9986, National Bureau of Economic Research, Inc.
    6. Donatos, George S. & Mergos, George J., 1991. "Residential demand for electricity: The case of Greece," Energy Economics, Elsevier, vol. 13(1), pages 41-47, January.
    7. Lee, Byoung-Hoon & Ahn, Hyeon-Hyo, 2006. "Electricity industry restructuring revisited: the case of Korea," Energy Policy, Elsevier, vol. 34(10), pages 1115-1126, July.
    8. Westley, Glenn D, 1984. "Electricity Demand in a Developing Country," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 459-67, August.
    9. Moya, Oscar E., 2002. "Experience and new challenges in the Chilean generation and transmission sector," Energy Policy, Elsevier, vol. 30(7), pages 575-582, June.
    10. Lijesen, Mark G., 2007. "The real-time price elasticity of electricity," Energy Economics, Elsevier, vol. 29(2), pages 249-258, March.
    11. José Miguel Benavente & Alexander Galetovic & Ricardo Sanhueza & Pablo Serra, 2005. "Estimando la Demanda Residencial por Electricidad en Chile: El Consumo es Sensible al Precio," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 42(125), pages 31-61.
    12. Glenn D. Westley, 1989. "Nontraditional Partial Adjustment Models and Their Use in Estimating the Residential Demand for Electricity in Costa Rica," Land Economics, University of Wisconsin Press, vol. 65(3), pages 254-271.
    13. Chang, Youngho, 2007. "The New Electricity Market of Singapore: Regulatory framework, market power and competition," Energy Policy, Elsevier, vol. 35(1), pages 403-412, 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 in new window

    Cited by:
    1. Galetovic, Alexander & Muñoz, Cristián M., 2011. "Regulated electricity retailing in Chile," Energy Policy, Elsevier, vol. 39(10), pages 6453-6465, October.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:37:y:2009:i:2:p:560-569. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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