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Household electricity demand, the intrinsic flexibility index and UK wholesale electricity market prices

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  • Jacopo Torriti

    (University of Reading)

Abstract

During peak electricity demand periods, prices in wholesale markets can be up to nine times higher than during off-peak periods. This is because if a vast number of users is consuming electricity at the same time, power plants with higher greenhouse gas emissions and higher system costs are typically activated. In the UK, the residential sector is responsible for about one third of overall electricity demand and up to 60% of peak demand. This paper presents an analysis of the 2014–2015 Office for National Statistics National Time Use Survey with a view to derive an intrinsic flexibility index based on timing of residential electricity demand. It analyses how the intrinsic flexibility varies compared with wholesale electricity market prices. Findings show that spot prices and intrinsic flexibility to shift activities vary harmoniously throughout the day. Reflections are also drawn on the application of this research to work on demand side flexibility.

Suggested Citation

  • Jacopo Torriti, 2022. "Household electricity demand, the intrinsic flexibility index and UK wholesale electricity market prices," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(1), pages 7-27, January.
    • Handle: RePEc:spr:envpol:v:24:y:2022:i:1:d:10.1007_s10018-020-00296-1
    DOI: 10.1007/s10018-020-00296-1
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    References listed on IDEAS

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