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The price elasticity of electricity demand in South Australia

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  • Fan, Shu
  • Hyndman, Rob J.

Abstract

In this paper, the price elasticity of electricity demand, representing the sensitivity of customer demand to the price of electricity, has been estimated for South Australia. We first undertake a review of the scholarly literature regarding electricity price elasticity for different regions and systems. Then we perform an empirical evaluation of the historic South Australian price elasticity, focussing on the relationship between price and demand quantiles at each half-hour of the day. This work attempts to determine whether there is any variation in price sensitivity with the time of day or quantile, and to estimate the form of any relationships that might exist in South Australia.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 39 (2011)
Issue (Month): 6 (June)
Pages: 3709-3719

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Handle: RePEc:eee:enepol:v:39:y:2011:i:6:p:3709-3719

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Web page: http://www.elsevier.com/locate/enpol

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Keywords: Electricity demand Price elasticity Time series;

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References

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  1. Rob J Hyndman & Shu Fan, 2008. "Density forecasting for long-term peak electricity demand," Monash Econometrics and Business Statistics Working Papers, Monash University, Department of Econometrics and Business Statistics 6/08, Monash University, Department of Econometrics and Business Statistics.
  2. Robert H. Patrick & Frank A. Wolak, 2001. "Estimating the Customer-Level Demand for Electricity Under Real-Time Market Prices," NBER Working Papers 8213, National Bureau of Economic Research, Inc.
  3. Peter C. Reiss & Matthew W. White, 2005. "Household Electricity Demand, Revisited," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 853-883.
  4. Beenstock, Michael & Goldin, Ephraim & Nabot, Dan, 1999. "The demand for electricity in Israel," Energy Economics, Elsevier, Elsevier, vol. 21(2), pages 168-183, April.
  5. Narayan, Paresh Kumar & Smyth, Russell, 2005. "The residential demand for electricity in Australia: an application of the bounds testing approach to cointegration," Energy Policy, Elsevier, Elsevier, vol. 33(4), pages 467-474, March.
  6. Hansen, Bruce E, 2002. "Tests for Parameter Instability in Regressions with I(1) Processes," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 20(1), pages 45-59, January.
  7. Thomas Taylor & Peter Schwarz & James Cochell, 2005. "24/7 Hourly Response to Electricity Real-Time Pricing with up to Eight Summers of Experience," Journal of Regulatory Economics, Springer, Springer, vol. 27(3), pages 235-262, 01.
  8. Aubin, Christophe & Fougère, Denis & Husson, Emmanuel & Ivaldi, Marc, 1994. "Real-Time Pricing of Electricity of Residential Customers: Econometric Analysis of an Experiment," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 46, Institut d'Économie Industrielle (IDEI), Toulouse.
  9. Filippini, Massimo, 1995. "Electricity demand by time of use An application of the household AIDS model," Energy Economics, Elsevier, Elsevier, vol. 17(3), pages 197-204, July.
  10. Espey, James A. & Espey, Molly, 2004. "Turning on the Lights: A Meta-Analysis of Residential Electricity Demand Elasticities," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, Southern Agricultural Economics Association, vol. 36(01), April.
  11. Faruqui, Ahmad & George, Stephen, 2005. "Quantifying Customer Response to Dynamic Pricing," The Electricity Journal, Elsevier, Elsevier, vol. 18(4), pages 53-63, May.
  12. Massimo Filippini, 1999. "Swiss residential demand for electricity," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 6(8), pages 533-538.
  13. Ramanathan, Ramu & Engle, Robert & Granger, Clive W. J. & Vahid-Araghi, Farshid & Brace, Casey, 1997. "Shorte-run forecasts of electricity loads and peaks," International Journal of Forecasting, Elsevier, Elsevier, vol. 13(2), pages 161-174, June.
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Cited by:
  1. Desiderio Romero-Jordán & Pablo del Río & Cristina Peñasco, 2014. "Household electricity demand in Spanish regions. Public policy implications," Working Papers 2014/24, Institut d'Economia de Barcelona (IEB).
  2. Lim, Kyoung-Min & Lim, Seul-Ye & Yoo, Seung-Hoon, 2014. "Short- and long-run elasticities of electricity demand in the Korean service sector," Energy Policy, Elsevier, Elsevier, vol. 67(C), pages 517-521.
  3. Walsh, Darragh & Malaguzzi Valeri, Laura, 2014. "Gaming in the Irish Single Electricity Market and Potential Effects on Wholesale Prices," Papers, Economic and Social Research Institute (ESRI) WP488, Economic and Social Research Institute (ESRI).
  4. Han PHOUMIN & Shigeru KIMURA, 2014. "Analysis on Price Elasticity of Energy Demand in East Asia: Empirical Evidence and Policy Implications for ASEAN and East Asia," Working Papers, Economic Research Institute for ASEAN and East Asia (ERIA) DP-2014-05, Economic Research Institute for ASEAN and East Asia (ERIA).
  5. Heshmati, Almas, 2012. "Survey of Models on Demand, Customer Base-Line and Demand Response and Their Relationships in the Power Market," IZA Discussion Papers 6637, Institute for the Study of Labor (IZA).

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