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Energy efficiency programs in the context of increasing block tariffs: The case of residential electricity in Mexico

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  • Hancevic, P.
  • Lopez-Aguilar, J.

Abstract

Increasing block pricing schemes represent difficulties for applied researchers who try to recover demand parameters, in particular, price and income elasticities. The Mexican residential electricity tariff structure is amongst the most intricate around the globe. In this paper, we estimate the residential electricity demand and use the corresponding structural parameter estimates to simulate an energy efficiency improvement scenario, as suggested by the Energy Transition Law of December 2015. The simulated program consists of a massive replacement of electric appliances (air conditioners, fans, refrigerators, washing machines, and light-bulbs) for more energy-efficient units. The main empirical findings are the following: overall residential electricity consumption decreases 8.9% and the associated expenditure falls 11.1%. Additionally, the electricity subsidy decreases 360 million of USD per year and there is an annual cut in CO2 emissions of 3.5 million of tons. Acknowledgement : We would like to thank seminar participants at CIDE for their helpful comments and suggestions. We are grateful for the much valuable help on data collection by the Subsecretar ?a de Electricidad at the Mexican Energy Ministry (SENER).

Suggested Citation

  • Hancevic, P. & Lopez-Aguilar, J., 2018. "Energy efficiency programs in the context of increasing block tariffs: The case of residential electricity in Mexico," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277442, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae18:277442
    DOI: 10.22004/ag.econ.277442
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    Cited by:

    1. Hancevic, Pedro I. & Nuñez, Hector M. & Rosellon, Juan, 2017. "Distributed photovoltaic power generation: Possibilities, benefits, and challenges for a widespread application in the Mexican residential sector," Energy Policy, Elsevier, vol. 110(C), pages 478-489.

    More about this item

    Keywords

    Resource/Energy Economics and Policy;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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