Title :
Tool for determining price elasticity of electricity demand and designing dynamic price program
Author :
Dan Ton ; Biviji, M.A. ; Nagypal, E. ; Jianhui Wang
Author_Institution :
U.S. Dept. of Energy, Washington, DC, USA
Abstract :
A tool has been developed to determine the price elasticity of electricity demand using data from dynamic pricing pilots with time of use and/or critical peak pricing rates. Elasticity values are derived from an augmented Constant Elasticity of Substitution model. Using the calculated elasticity values, the tool can further project changes in electricity loads as a function of electricity prices and temperatures as specified by utilities; conversely, the tool is capable of calculating the pricing structure necessary to achieve utility-defined objectives for peak load reduction and revenue, under a given set of temperatures. Data from the California Statewide Pricing Pilot study was used for tool development and testing. Tool testing was conducted by comparing the loads and shift in loads, calculated from the tool versus observed from the pilot study, resulting in close agreements. Furthermore, use of this tool under three likely scenarios of interest to utilities is presented.
Keywords :
dynamic programming; power markets; pricing; California statewide pricing pilot study; augmented constant elasticity; critical peak pricing rates; dynamic price program design; elasticity values; electricity demand; electricity loads; peak load reduction; price elasticity determination; pricing structure; substitution model; time-of-use; tool development; tool testing; utility-defined objectives; Elasticity; Electricity; Equations; Load modeling; Mathematical model; Pricing; Testing; Dynamic Pricing; Electric Utilities; Load Management; Smart Grids;
Conference_Titel :
Innovative Smart Grid Technologies (ISGT), 2013 IEEE PES
Conference_Location :
Washington, DC
Print_ISBN :
978-1-4673-4894-2
Electronic_ISBN :
978-1-4673-4895-9
DOI :
10.1109/ISGT.2013.6497848