Estimation of elasticities for electricity demand in Brazilian households and policy implications

Uhr, Daniel de Abreu Pereira; Chagas, André Luís Squarize; Uhr, Júlia Gallego Ziero

doi:10.1016/j.enpol.2019.01.061

Cited by 41 publications

(9 citation statements)

References 43 publications

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“…Source data for price analyses of electricity demand elasticity are often panel data at the household level [35,49,50], that is multi-dimensional data including measurements and observations of various phenomena over time for the same individuals. Basing the analyses on such data sets allows for a very accurate analysis, but the results become very susceptible to regional factors and require very high detail of household data.…”

Section: Literature Reviewmentioning

confidence: 99%

Demand Price Elasticity of Residential Electricity Consumers with Zonal Tariff Settlement Based on Their Load Profiles

2019

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The concept of price elasticity of demand has been widely used for the assessment of the consumers’ behavior in the electricity market. As the residential consumers represent a significant percentage of the total load, price elasticity of their demand may be used to design desirable demand side response programs in order to manage peak load in a power system. The method presented in this study proposes an alternative approach towards price elasticity determination for zonal tariff users, based on comparisons of load profiles of consumers settled according to flat and time-of-use electricity tariffs. A detailed explanation of the proposed method is presented, followed by a case-study of price elasticity determination for residential electricity consumers in Poland. The forecasted values of price elasticity of demand for the Polish households using time-of-use (TOU) tariff vary between −1.7 and −2.3, depending on the consumers’ annual electricity consumption. Moreover, an efficiency study of residential zonal tariff is performed to assess the operation of currently applicable electricity tariffs. Presented analysis is based on load profiles published by Distribution System Operators and statistical data, but the method can be applied to the real-life measurements from the smart metering systems as well when such systems are accessible for residential consumers.

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Section: Literature Reviewmentioning

confidence: 99%

Demand Price Elasticity of Residential Electricity Consumers with Zonal Tariff Settlement Based on Their Load Profiles

2019

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“…The economic theory, in the study of the demand for electricity, diverges on the proxy used about the price. There are studies that support the use of marginal price Reiss and White, 2005), and studies that support the use of average price (Irffi et al, 2009;Martins et al, 2021;Uhr et al, 2019). The problem is that marginal prices are not available in Brazil, so studies developed on industrial demand use average prices (Dantas et al, 2016;Gross et al, 2017;.…”

Section: Datamentioning

confidence: 99%

Dynamics of Industrial Electricity Demand in the State of Bahia (Brazil): Evolution of Price and Income and COVID-19 Implications

Martins

Fernandes

Santos

et al. 2023

IJEEP

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The growth in demand for electricity is a determining factor for the regional development. This research aimed to estimate the price and income elasticity parameters of the industrial demand for electricity in the State of Bahia, Brazil, from January 2003 to June 2022, in addition to making forecasts for the period from July to December 2022. After verifying that some of the analyzed data were non-stationary, we chose to use the cointegration method, estimating the econometric model through the Error Correction Mechanism (ECM). The ECM considers the model’s variables and their lags, relating the series’ short and long-run trends. The estimated parameters were inelastic and presented the following values: 0.501 and 0.762 (price and income, long-run) and 0.482 and 0.702 (price and income, short-run). The adjustment coefficient between the short and long-run was also statistically significant and indicated that approximately 8% of the difference between the effective value and the long-run value (balance value) is corrected in each period, demonstrating the rigidity of the consumption structure of electricity in the industrial sector in Bahia. The model also demonstrated an 8.1% reduction in consumption during COVID-19 incidence period. Regarding the forecasts, they proved to be robust and with an average difference of 5.4% in relation to what actually happened in the months of July and August 2022. Thus, the calculated parameters are configured as another source of information for public policymakers and private investors interested in the electricity sector in the State of Bahia.

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“…Not only is Brazil known for its large and persistent regional inequality (Ehrl and Monasterio, 2019), but the electricity sector also presents some unique features that differ across space. Although the system is highly regulated by the Brazilian Electricity Regulatory Agency (ANEEL), tariffs must reflect the cost of electricity generation, transmission and distribution (de Abreu Pereira Uhr et al, 2019). Distribution costs obviously differ due to the continental dimension of the country, poor infrastructure quality and the need to transmit electricity through the interconnected system SIN (Sistema Interligado Nacional).…”

Section: Introductionmentioning

confidence: 99%

Regional Estimates of Residential Electricity Demand in Brazil

Carrasco-Gutierrez¹,

Ehrl²

2023

IJEEP

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Understanding consumers' short- and long-run response to electricity prices is essential for efficient market regulations, supplier planning decisions, and evaluation of policies for the economic development of the country. This work estimates the determinants of residential electricity demand for Brazil and for each of its five geographic regions, North, Northeast, Midwest, Southeast and South in a cointegration setup. The demand model accounts for the electricity prices, personal income, production and price of appliances, and climatic conditions, all of which show pronounced regional disparities. The data confirm that price and income elasticities are inelastic, both in the short- and long-run. Regional disaggregation yields the insight that price elasticities are insignificant in the North, Southeast and South, both in the short- and long-run. For the country as a whole, the short-term price effect is insignificant as well. This novel result casts doubt on recently implemented and future price-based policy measures that are necessary to reduce electricity consumption in a system that is frequently close to its maximum capacity. Brazil’s dependency on increasingly scarce rainfall and the rising electricity demand due to income increases require effective responses, however.

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Estimation of elasticities for electricity demand in Brazilian households and policy implications

Cited by 41 publications

References 43 publications

Demand Price Elasticity of Residential Electricity Consumers with Zonal Tariff Settlement Based on Their Load Profiles

Demand Price Elasticity of Residential Electricity Consumers with Zonal Tariff Settlement Based on Their Load Profiles

Dynamics of Industrial Electricity Demand in the State of Bahia (Brazil): Evolution of Price and Income and COVID-19 Implications

Regional Estimates of Residential Electricity Demand in Brazil

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