Residential End Use Electricity Demand and the Implications for Real Time Pricing in Sweden

42 Pages Posted: 5 Mar 2015

See all articles by Mattias Vesterberg

Mattias Vesterberg

Umeå University - Centre for Environmental and Resource Economics

Chandra Kiran Krishnamurthy

CERE, Umeå; Department of Forest Economics

Oben Bayrak

Swedish University of Agricultural Sciences (SLU) - Centre for Environmental and Resource Economics (CERE), Students ; Centre for Environmental and Resource Economics

Date Written: December 15, 2014

Abstract

Using a unique and highly detailed data set of energy consumption at the appliance-level for 390 Swedish households, seemingly unrelated regression (SUR)-based end-use specific load curves are estimated. The estimated load curves are then used to explore possible restrictions on load shifting (e.g. the office hours schedule) as well as the cost implications of different load shift patterns. The cost implications of shifting load from “expensive” to “cheap” hours, using aggregate spot price data, is computed to be very small; roughly 2-5% daily cost reduction from shifting load up to seven hours ahead, indicating small incentives for households (and suppliers) to adopt dynamic pricing of electricity. In addition, end-use-specific income elasticites are also estimated, for the first time for Sweden, using again a SUR framework. The estimated income elasticties are large and significant, varying from a high of 0.8-1.25 for heating to a low of 0.2−0.5 for lighting. Aggregate income elasticity is also high, varying from 0.5 to 0.81. Our results have important implications for Swedish energy policy, in particular for the Swedish government’s stated goal of real time pricing.

Keywords: Direct Metering, Residential Electricity Demand, Real time electricity pricing

JEL Classification: Q48, Q41, D12, C30

Suggested Citation

Vesterberg, Mattias and Krishnamurthy, Chandra Kiran B and Bayrak, Oben, Residential End Use Electricity Demand and the Implications for Real Time Pricing in Sweden (December 15, 2014). Available at SSRN: https://ssrn.com/abstract=2573666 or http://dx.doi.org/10.2139/ssrn.2573666

Mattias Vesterberg (Contact Author)

Umeå University - Centre for Environmental and Resource Economics ( email )

Umeå, S-901 87
Sweden

Chandra Kiran B Krishnamurthy

CERE, Umeå ( email )

Almas Allé 10
Umeå, 750 07
Sweden

HOME PAGE: http://cere.se/en.html

Department of Forest Economics ( email )

S-901 83 Umea
Sweden

Oben Bayrak

Swedish University of Agricultural Sciences (SLU) - Centre for Environmental and Resource Economics (CERE), Students ( email )

Umeå
Sweden

HOME PAGE: http://https://sites.google.com/view/obenbayrak

Centre for Environmental and Resource Economics ( email )

Umeå University
Umeå, S-901 87
Sweden

HOME PAGE: http://https://sites.google.com/view/obenbayrak

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