How aggregate electricity demand responds to hourly wholesale price fluctuations
- Electricity needs to be consumed at the very moment of production, leading wholesale prices to fluctuate widely at (sub-)hourly time scales. This article investigates the response of aggregate electricity demand to such price variations. Using wind energy as an instrument, we estimate a significant and robust short-term price elasticity of about −0.05 in Germany and attribute this to industrial consumers. As the share of consumption that is exposed to real-time prices (currently less than 25%) expands, we expect the aggregated price elasticity to grow.
Document Type: | Article |
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Language: | English |
Author(s): | Lion HirthORCiD, Tarun M. Khanna, Oliver Ruhnau |
Parent Title (English): | Energy Economics |
ISSN: | 0140-9883 |
Publisher: | Elsevier BV |
Publication year: | 2024 |
Publishing Institution: | Hertie School |
DOI: | https://doi.org/10.1016/j.eneco.2024.107652 |
Release Date: | 2024/06/03 |
Volume: | 135 |
Article Number: | 107652 |
AY 23/24: | AY 23/24 |
Licence of document (German): | Metadaten / metadata |