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Article
Publication date: 1 April 1979

G. Jan van Helden

Aims to show how interview data may be used to obtain an indication of the price elasticity of household electricity consumption. Examines how respondents think they will react to…

Abstract

Aims to show how interview data may be used to obtain an indication of the price elasticity of household electricity consumption. Examines how respondents think they will react to price changes.

Details

European Journal of Marketing, vol. 13 no. 4
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 12 September 2023

Mingzhen Song, Lingcheng Kong and Jiaping Xie

Rapidly increasing the proportion of installed wind power capacity with zero carbon emission characteristics will help adjust the energy structure and support the realization of…

Abstract

Purpose

Rapidly increasing the proportion of installed wind power capacity with zero carbon emission characteristics will help adjust the energy structure and support the realization of carbon neutrality targets. The intermittency of wind resources and fluctuations in electricity demand has exacerbated the contradiction between power supply and demand. The time-of-use pricing and supply-side allocation of energy storage power stations will help “peak shaving and valley filling” and reduce the gap between power supply and demand. To this end, this paper constructs a decision-making model for the capacity investment of energy storage power stations under time-of-use pricing, which is intended to provide a reference for scientific decision-making on electricity prices and energy storage power station capacity.

Design/methodology/approach

Based on the research framework of time-of-use pricing, this paper constructs a profit-maximizing electricity price and capacity investment decision model of energy storage power station for flat pricing and time-of-use pricing respectively. In the process, this study considers the dual uncertain scenarios of intermittency of wind resources and random fluctuations in power demand.

Findings

(1) Investment in energy storage power stations is the optimal decision. Time-of-use pricing will reduce the optimal capacity of the energy storage power station. (2) The optimal capacity of the energy storage power station and optimal electricity price are related to factors such as the intermittency of wind resources, the unit investment cost, the price sensitivities of the demand, the proportion of time-of-use pricing and the thermal power price. (3) The carbon emission level is affected by the intermittency of wind resources, price sensitivities of the demand and the proportion of time-of-use pricing. Incentive policies can always reduce carbon emission levels.

Originality/value

This paper creatively introduced the research framework of time-of-use pricing into the capacity decision-making of energy storage power stations, and considering the influence of wind power intermittentness and power demand fluctuations, constructed the capacity investment decision model of energy storage power stations under different pricing methods, and compared the impact of pricing methods on optimal energy storage power station capacity and carbon emissions.

Highlights

  1. Electricity pricing and capacity of energy storage power stations in an uncertain electricity market.

  2. Investment strategy of energy storage power stations on the supply side of wind power generators.

  3. Impact of pricing method on the investment decisions of energy storage power stations.

  4. Impact of pricing method, energy storage investment and incentive policies on carbon emissions.

  5. A two-stage wind power supply chain including energy storage power stations.

Electricity pricing and capacity of energy storage power stations in an uncertain electricity market.

Investment strategy of energy storage power stations on the supply side of wind power generators.

Impact of pricing method on the investment decisions of energy storage power stations.

Impact of pricing method, energy storage investment and incentive policies on carbon emissions.

A two-stage wind power supply chain including energy storage power stations.

Details

Industrial Management & Data Systems, vol. 123 no. 11
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 4 July 2023

Stephanie Halbrügge, Paula Heess, Paul Schott and Martin Weibelzahl

The purpose of this paper is to examine how active consumers, i.e. consumers that can inter-temporally shift their load, can influence electricity prices. As demonstrated in this…

Abstract

Purpose

The purpose of this paper is to examine how active consumers, i.e. consumers that can inter-temporally shift their load, can influence electricity prices. As demonstrated in this paper, inter-temporal load shifting can induce negative electricity prices, a recurring phenomenon on power exchanges.

Design/methodology/approach

The paper presents a novel electricity-market model assuming a nodal-pricing, energy-only spot market with active consumers. This study formulates an economic equilibrium problem as a linear program and uses an established six-node case study to compare equilibrium prices of a model with inflexible demand to a model with flexible demand of active consumers.

Findings

This study illustrates that temporal coupling of hourly market clearing through load shifting of active consumers can cause negative electricity prices that are not observed in a model with ceteris paribus inflexible demand. In such situations, where compared to the case of inflexible demand more flexibility is available in the system, negative electricity prices signal lower total system costs. These negative prices result from the use of demand flexibility, which, however, cannot be fully exploited due to limited transmission capacities, respectively, loop-flow restrictions.

Originality/value

Literature indicates that negative electricity prices result from lacking flexibility. The results illustrate that active consumers and their additional flexibility can lead to negative electricity prices in temporally coupled markets, which in general contributes to increased system efficiency as well as increased use of renewable energy sources. These findings extend existing research in both the area of energy flexibility and causes for negative electricity prices. Therefore, policymakers should be aware of such (temporal coupling) effects and, e.g. continue to allow negative electricity prices in the future that can serve as investment signals for active consumers.

Details

International Journal of Energy Sector Management, vol. 18 no. 3
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 3 April 2017

Khulod Elsahati, Edward Godfrey Ochieng, Tarila Zuofa, Ximing Ruan and Bekithemba Mpofu

In recent times, electricity as one of the most important energy sources has witnessed considerable decreases in consumption figures. These cutbacks have been mainly due to the…

Abstract

Purpose

In recent times, electricity as one of the most important energy sources has witnessed considerable decreases in consumption figures. These cutbacks have been mainly due to the growing increasing living standards, minimal governance and political fracture. Thus, this paper aims to appraise the supply of electricity side in an attempt to propose a sustainable electricity framework.

Design/methodology/approach

The reviewed literature identified a gap within the previous literature which had not previously been investigated; however, to carry out the investigation, a research strategy had to be formulated. Twenty semi-structured interviews were carried out with managers, engineers and electrical professionals. Prior to the commencement of the main study, a preliminary pilot study was carried out among ten senior practitioners in the General Electric Company of Libya. The purpose of the pilot study was to assess clarity of questions, timing and suitability of the respondents for the study, and to establish its reliability and validity.

Findings

From the aspect of the demand, the study found that there was a diverse set of factors that affect electricity demand in Libya. These included the average real price of electricity, the real value of the imported electrical appliances, gross domestic product, population, the temperature difference and the lagged electricity demand. Secondly, from the aspect of electricity supply, the study found that there was a diverse set of factors that affect electricity projects in Libya or even the development of existing projects. These factors included electricity demand, political effects, recession, oil prices and improved development of other infrastructure.

Research limitations/implications

Due to limitations in time and cost, political instability in the country and the lack of security, the entire analysis was only of the demand for electricity in Libya based on data collected from secondary sources and primary data resources. The ordinary least squares method of regression used for the purpose of quantitative analysis only included the factors related to the demand for electricity in Libya. It is worth noting that the research work did not include any quantitative analysis that comprised factors related to the supply of electricity in the country. Such an analysis could have technically carved the ways to augment the supply of electricity. Therefore, the context of the research work is one-sided that focuses primarily on the demand.

Practical implications

The problem confronting development of electricity projects in Libya has three components: The first is the national significance of the projects as a physical resource. The second is the conflict arising politically from within. The third is the lack of consideration given to the specific resource management issues associated with the projects within the government plans and policy statements. In addition, participants further claimed that there were three more independent factors that could affect the level of electricity demand in Libya. These were urbanisation, industrialisation and literacy rates.

Social implications

The participants also believed that as the rate of socio-economic development increases, the demand for electricity is expected to rise. Urbanisation, industrialisation and literacy rates are some of the developments which will exert more demand pressure on the electricity supply. The participants claimed that the government should take into account the urbanisation rates in Libya in the energy policy formulation. Electricity companies can also take a cue from the urbanisation trends and other socio-economic developments to plan the delivery of electricity according to the rising demand.

Originality/value

This study appraised the supply of electricity side in Libya and proposed a sustainable framework that could be used by policymakers to address energy demand issues in Libya.

Details

International Journal of Energy Sector Management, vol. 11 no. 1
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 14 September 2018

Xinzhi Zhu, Shuo Yang, Jingyi Lin, Yi-Ming Wei and Weigang Zhao

Electricity demand forecasting has always been a key issue, and inaccurate forecasts may mislead policymakers. To accurately predict China’s electricity demand up to 2030, this…

Abstract

Purpose

Electricity demand forecasting has always been a key issue, and inaccurate forecasts may mislead policymakers. To accurately predict China’s electricity demand up to 2030, this paper aims to establish a cross-validation-based linear model selection system, which can consider many factors to avoid missing useful information and select the best model according to estimated out-of-sample forecast performances.

Design/methodology/approach

With the nine identified influencing factors of electricity demand, this system first determines the parameters in four alternative fitting procedures, where for each procedure a lot of cross-validation is performed and the most frequently selected value is determined. Then, through comparing the out-of-sample performances of the traditional multiple linear regression and the four selected alternative fitting procedures, the best model is selected in view of forecast accuracy and stability and used for forecasting under four scenarios. Besides the baseline scenario, this paper investigates lower and higher economic growth and higher consumption share.

Findings

The results show the following: China will consume 7,120.49 TWh, 9,080.38 TWh and 11,649.73 TWh of electricity in 2020, 2025 and 2030, respectively; there is hardly any possibility of decoupling between economic development level and electricity demand; and shifting China from an investment-driven economy to a consumption-driven economy is greatly beneficial to save electricity.

Originality/value

Following insights are obtained: reasonable infrastructure construction plans should be made for increasing electricity demand; increasing electricity demand further challenges China’s greenhouse gas reduction target; and the fact of increasing electricity demand should be taken into account for China’s prompting electrification policies.

Details

Journal of Modelling in Management, vol. 13 no. 3
Type: Research Article
ISSN: 1746-5664

Keywords

Article
Publication date: 15 December 2021

Timothy King Avordeh, Samuel Gyamfi and Alex Akwasi Opoku

Some of the major concerns since the implementation of smart meters (prepaid meters) in some parts of Ghana is how electricity consumers have benefited from data obtained from…

Abstract

Purpose

Some of the major concerns since the implementation of smart meters (prepaid meters) in some parts of Ghana is how electricity consumers have benefited from data obtained from these meters by providing important statistics on electricity-saving advice; this is one of the key demand-side management methods for achieving load reduction in residential homes. Appliance shifting techniques have proved to be an effective demand response strategy in load reduction. The purpose of this paper is therefore to help consumers of electricity understand when and how they can shift some appliances from peak to off-peak and vice versa.

Design/methodology/approach

The research uses an analysis technique of Richardson et al. (2010). In their survey on time-of-use surveys to determine the usage of electricity in households as far as appliance shifting was concerned, this study allowed for the assessment of how the occupants’ daily activities in households affect residential electricity consumption. Fell et al. (2014) modeled an aggregate of electricity demand using different appliances (n) in the household. The data for the peak time used in this study were identified from 05:00 to 08:00 and 17:00 to 21:00 for testing the load shifting algorithms, and the off-peak times were pecked from 10:00 to 16:00 and 23:00. This study technique used load management considering real-time scheduling for peak levels in the selected homes. The household devices are modeled in terms of controlled parameters. Using this study’s time-triggered loads on refrigerators and air conditioning systems, the findings suggested that peak loads can be reduced to 45% as a means of maintaining the simultaneous quality of service. To minimize peak loads to around 35% or more, Chaiwongsa and Wongwises (2020) have indicated that room air conditioning and refrigerator loads are simpler to move compared to other household appliances such as cooking appliances. Yet in conclusion, this study made a strong case that a decrease in household peak demand for electricity is primarily contingent on improvements in human behavior.

Findings

This study has shown that appliance load shifting is a very good way of reducing electrical consumption in residential homes. The comparative performance shows a moderate reduction of 1% in load as was found in the work done by Laicaine (2014). The results, however, indicate that load shifting to a large extent can be achieved by consumer behavioral change. The main response to this study is to advise policymakers in Ghana to develop the appropriate demand response and consumer education towards the general reduction in electrical load in domestic households. The difficulty, however, is how to get the attention of consumer’s on how to start using appliances with less load at peak and also shift some appliances from off-peak times. By increasing consumer knowledge and participation in demand response, it is possible to achieve more efficiency and flexibility in load reduction. The findings were benchmarked with existing comparison studies but may benefit from the potential production of structured references. However, the findings show that load shifting can only be done by modifying consumer actions.

Research limitations/implications

It should be remembered that this study showed that the use of appliances shifting in residential homes results in load reduction benefits for customers, expressed as savings in electricity prices. The next step will be to build on this cost/benefit study to explain and measure how these reductions transform into net consumer gains for all Ghanaian households.

Practical/implications

Load shifting will include load controllers in the future, which would automatically handle electricity consumption from various appliances in the home. Based on the device and user needs, the controllers can prioritize loads and appliance usage. The algorithms that underpin automatic load controllers will include knowledge about the behaviors of groups of end users. The results on the time dependency of activities may theoretically inform the algorithms of automatic demand controllers.

Originality/value

This paper addresses an important need for the country in the midst of finding solutions to an unending energy crisis. This paper presents demand response to the Ghanaian electricity consumer as a means to help in the reduction of load in residential homes. This is a novel research as no one has at yet carried out any research in this direction in Ghana. This paper has some new information to offer in the field of demand in household electricity consumption.

Details

International Journal of Energy Sector Management, vol. 16 no. 4
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 13 July 2021

Timothy King Avordeh, Samuel Gyamfi and Alex Akwasi Opoku

The purpose of this paper is to investigate the impact of temperature on residential electricity demand in the city of Greater Accra, Ghana. It is believed that the increasing…

Abstract

Purpose

The purpose of this paper is to investigate the impact of temperature on residential electricity demand in the city of Greater Accra, Ghana. It is believed that the increasing trend of temperatures may significantly affect people’s lives and demand for electricity from the national grid. Given the recurrent electricity crisis in Ghana, this study will investigate both the current and future residential energy demands in the light of temperature fluctuations. This will inform future power generation using renewable energy resources mix to find a sustainable solution to the recurrent energy demand challenges in Ghana. This study will help the Government of Ghana to better understand the temperature dependence of residential energy demand, which in turn will help in developing behavioral modification programs aimed at reducing energy consumption. Monthly data for the temperature and residential electricity consumption for Greater Accra Region from January 2007 to December 2018 obtained from the Ghana Meteorological Service (GMS) and Ghana Grid Company (Gridco), respectively, are used for the analysis.

Design/methodology/approach

This study used monthly time series data from 2007 to 2018. Data on monthly electricity demand and temperature are obtained from the Ghana Grid Company and GMS. The theoretical framework for residential electricity consumption, the log-linear demand equation and time series regression approaches was used for this study. To demonstrate certain desirable properties and to produce good estimators in this study, an analysis technique of ordinary least squares measurement was also applied.

Findings

This study showed an impact on residential electricity requirements in the selected regions of Greater Accra owing to temperature change. The analysis suggests a substantial positive response to an increase in temperature demand for residential electricity and thus indicates a growth of the region’s demand for electricity in the future because of temperature changes. As this analysis projects, the growth in the electricity demand seems too small for concern, perhaps because of the incoherence of the mechanisms used to regulate the temperature by the residents. However, two points should be considered when drawing any conclusions even in the case of Greater Accra alone. First, the growth in the demand for electricity shown in the present study is the growth of demand due only to increasing temperatures that do not consider changes in all the other factors driving the growth of demand. The electricity demand will in the future increase beyond what is induced by temperature, due to increasing demand, population and mechanization and other socioeconomic factors. Second, power consumption understated genuine electricity demand, owing to the massive shedding of loads (Dumsor) which occurred in Ghana from 2012 to 2015 in the analysis period that also applies in the Greater Accra region. Given both of these factors, the growth in demand for electricity is set to increase in response to climate change, which draws on the authorities to prepare more critically on capacity building which loads balancing. The results also revealed that monthly total residential electricity consumption, particularly the monthly peak electricity consumption in the city of Accra is highly sensitive to temperature. Therefore, the rise in temperature under different climate change scenarios would have a high impact on residential electricity consumption. This study reveals that the monthly total residential electricity demand in Greater Accra will increase by up to 3.1%.

Research limitations/implications

The research data was largely restricted to only one region in Ghana because of the inconsistencies in the data from the other regions. The only climate variable use was temperature because it was proven in the literature that it was the most dominant variable that affects electricity demand, so it was not out of place to use only this variable. The research, however, can be extended to capture the entire regions of the country if sponsorship and accurate data can be obtained.

Practical implications

The government as the policy and law-making authority has to play the most influential role to ensure adaptation at all levels toward the impact of climate change for residential consumers. It is the main responsibility of the government to arrange enough supports to help residential consumers adapt to climate change and try to make consumers self-sufficient by modification of certain behaviors rather than supply dependent. Government bodies need to carefully define their climate adaptation supports and incentive programs to influence residential-level consumption practices and demand management. Here, energy policies and investments need to be more strategic. The most critical problem is to identify the appropriate adaptation policies that favor the most vulnerable sectors such as the residential sector.

Social implications

To evaluate both mitigation and adaptation policies, it is important to estimate the effect of climate change on energy usage around the world. Existing empirical figures, however, are concentrated in Western nations, especially the USA. To predict how electricity usage will shift in the city of Greater Accra, Ghana, the authors used regular household electricity consumption data.

Originality/value

The motivation for this paper and in particular the empirical analysis for Ghana is originality for the literature. This paper demonstrates an adequate understanding of the relevant literature in modern times.

Article
Publication date: 7 November 2016

Akihiro Otsuka and Shoji Haruna

This paper aims to estimate electricity demand functions in Japan’s residential sector.

Abstract

Purpose

This paper aims to estimate electricity demand functions in Japan’s residential sector.

Design/methodology/approach

The authors use a partial adjustment model and empirically analyze regional residential electricity demand by using data on 47 Japanese prefectures.

Findings

The results reveal that the price elasticity of residential electricity demand during the analytical period (1990-2010) is remarkably different among prefectures, depending on the magnitude of floor space per household. In addition, this study finds that price elasticity is high compared with income elasticity, implying that residential electricity demand changes with rates. Furthermore, an analysis of factors influencing electricity demand in the residential sector shows that increasing electricity demand growth in each region can be attributable mainly to declining electricity rates and increasing number of households.

Research limitations/implications

These results suggest that monitoring the electricity rates and the number of households is important for forecasting future residential electricity demand at region.

Originality/value

The study considers the impact of the number of households on overall electricity demand and identifies other factors contributing to growth in residential electricity demand. The findings can be used to derive projections for future electricity demand.

Details

International Journal of Energy Sector Management, vol. 10 no. 4
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 21 November 2008

Govinda R. Timilsina and Ram M. Shrestha

The purpose of this paper is to examine potential demand side management (DSM) programs in terms of their impacts to the overall economy in Thailand.

1600

Abstract

Purpose

The purpose of this paper is to examine potential demand side management (DSM) programs in terms of their impacts to the overall economy in Thailand.

Design/methodology/approach

A multi‐sector computable general equilibrium (CGE) model of Thailand has been developed to accomplish the objectives of this study. The potential DSM program considered refers to replacement of less efficient electrical appliances with their efficient counterparts in the household sector in Thailand.

Findings

The study finds that the economy‐wide impacts of the DSM program (e.g., economic welfare, GDP, international trade) depend on three key factors: the project economics of the DSM option or the ratio of unit cost of electricity savings to price of electricity (CPR); the implementation strategy of the DSM option; and scale or size of the DSM option. This paper shows that the welfare impacts of the DSM programs would improve along with the project economics of the DSM programs. If the DSM program is implemented under the CDM, the welfare impacts would increase along with the price for certified emission reductions units. On the other hand, the welfare impacts would increase up to the optimal size or scale of the program, but would start to deteriorate if the size is increased further.

Research limitations/implications

The welfare function considered in this paper does not account for benefits of local air pollution reductions. The study provides crucial insights on designing DSM projects in Thailand to ensure that DSM programs are beneficial for the economy as a whole.

Originality/value

Analyses of DSM options under the CDM using CGE models are not available in the literature. This is the first paper in this area.

Details

International Journal of Energy Sector Management, vol. 2 no. 4
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 2 August 2011

Austin C. Otegbulu

The purpose of this paper is to focus on households' willingness to pay for electricity consumption and mitigation expenditure due to poor electricity infrastructure as a measure…

Abstract

Purpose

The purpose of this paper is to focus on households' willingness to pay for electricity consumption and mitigation expenditure due to poor electricity infrastructure as a measure of demand and tariff setting.

Design/methodology/approach

In this paper, the demand side management (DSM) approach was adopted in establishing user demand for electricity in the study area.

Findings

Based on the high cost (averting expenditure) of providing alternative power supply, households are willing to pay extra for more reliable and regular power supply.

Practical implications

The study is a deviation from the usual command or supply side management approach to infrastructure provision and management.

Originality/value

There is limited research on DSM approach to electricity infrastructure provision in Nigeria. The study will enhance the chances of cost recovery under private‐public partnership arrangement. The paper identifies that a reliable and reasonable priced electricity supply is essential for a developing country.

Details

Journal of Financial Management of Property and Construction, vol. 16 no. 2
Type: Research Article
ISSN: 1366-4387

Keywords

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