Factoring the elasticity of demand in electricity prices

Daniel S. Kirschen, Goran Strbac, Pariya Cumperayot, Dilemar Paiva De Mendes

    Research output: Contribution to journalArticlepeer-review

    Abstract

    As electricity markets are liberalized, consumers become exposed to more volatile electricity prices and may decide to modify the profile of their demand to reduce their electricity costs. This paper analyzes the effect that the market structure can have on the elasticity of the demand for electricity. It then describes how the consumers' behavior can be modeled using a matrix of self- and cross-elasticities. It is shown how these elasticities can be taken into consideration when scheduling generation and setting the price of electricity in a pool based electricity market. These concepts are illustrated using a 26-generator system. © 2000 IEEE.
    Original languageEnglish
    Pages (from-to)612-617
    Number of pages5
    JournalIEEE Transactions on Power Systems
    Volume15
    Issue number2
    DOIs
    Publication statusPublished - May 2000

    Keywords

    • Elasticity
    • Generation scheduling
    • Power system economics
    • Pricing

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