The price elasticity of electricity demand in South Australia

In this paper, the price elasticity of electricity demand, representing the sensitivity of customer demand to the price of electricity, has been estimated for South Australia. We first undertake a review of the scholarly literature regarding electricity price elasticity for different regions and systems. Then we perform an empirical evaluation of the historic South Australian price elasticity, focussing on the relationship between price and demand quantiles at each half-hour of the day.This work attempts to determine whether there is any variation in price sensitivity with the time of day or quantile, and to estimate the form of any relationships that might exist in South Australia.

► We review the scholarly literature on electricity own-price elasticity for different regions and systems.
► We use annual log-linear econometric models of the electricity demand to estimate the historic South Australian price elasticity.
► We focus on the relationship between price and demand quantiles at each half-hour of the day.
► The overall price elasticity in South Australia ranges from −0.363 to −0.428.