| dc.description.abstract | This study employs the IV-GMM model to analyze panel data from the five price areas of Norway, estimating short-term spot price elasticities across hourly, daily, weekly, and monthly intervals from 2021 to 2023.
The results reveal varying degrees of responsiveness to price changes across different intervals and price areas, with NO1 and NO2 exhibiting higher elasticity compared to NO3, NO4, and NO5. The monthly spot price elasticity of residential electricity consumption is estimated between -0.08 to -0.01(or a weighted average of 0.022).
Additionally, monthly purchase price elasticities are calculated, considering the government compensation scheme introduced in December 2021 and including the averages of other components of purchase price such as grid rent and taxes. The estimates derived for the monthly purchase price elasticity range between -0.822 to -0.022 (or a weighted average of 0.227).
Overall, the study confirms the inelastic nature of household electricity demand in Norway, with implications for policy formulation and energy efficiency strategies. While the compensation scheme enhances household welfare and reduces price disparities, it also introduces minor economic inefficiencies.
The study underscores the importance of regional variations in demand responsiveness and highlights the need for precise estimations to inform policy decisions accurately. The limitation of the study lies in the approximation-based calculations, suggesting avenues for future research to incorporate actual purchase prices for a more nuanced analysis. | |
