Download PDF by Massimo Filippini: Elements of the Swiss Market for Electricity

By Massimo Filippini

1.1 monetary matters to be analyzed This examine examines parts of the Swiss marketplace for electrical energy: the residential electrical energy call for by means of time-of-use and the associated fee constitution of municipal electrical energy distribution utilities. The empirical result of call for and price elasticities permit the research of fascinating monetary and coverage matters comparable to the desirability of a frequent creation of time-of-use pricing for residential consumers, the desirability of side-by-side festival within the distribution of electrical energy and, extra usually, the industrial results of a discount of the weight issue and of mergers among electrical distribution utilities on charges. Desirability of time-of-use pricing within the final decade there was an intensifying debate in Switzerland approximately efficacy of electrical energy cost reforms with a view to enhance the potency of electrical energy use. This debate used to be initiated by means of major occasions. First, there has been an enormous progress of electrical energy intake. moment, the Chernobyl coincidence in 1986 aroused frequent public difficulty in regards to the difficulties linked to nuclear strength and waste disposal. accordingly, in 1991 the Swiss voted, in a referendum, a lO-year moratorium at the 2 building of latest nuclear energy vegetation. furthermore, plans to extend construction of hydroelectric strength (construction of latest dams or increasing present ones) were stiffly adverse by means of environmental teams. those advancements have always curtailed capability enlargement of family electrical energy offer. therefore, Switzerland throughout the wintry weather has to import electrical energy from overseas countries.

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Extra info for Elements of the Swiss Market for Electricity

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A common solution to this problem is to assume a two-stage budgeting process, and to estimate a conditional demand system for a subset of commodities for which information is available. This conditional demand system is used to derive a conditional expenditure or a conditional indirect utility function, which can be used to define monetary measures of the welfare effects of changes in commodity prices. 46) where e (pI, u: qh h) u: is the new group expenditure of household h needed to achieve utility h from the consumption of the subset of commodities g when facing the "policy case" price vector pi and qh (po.

24 In the electricity demand by time-of-use literature we find several studies analyzing the consumer welfare effects of price changes. 25 However, none of them estimate welfare changes using a complete demand 24 25 See for example the studies of Blisard and Blaylock (1991) and Heien and Pompelli (1989). For a presentation of the results of these studies see Aigner (1984). 44 system. , a subset of demand functions in a complete demand system. They assume a twostage budgeting process where for the first stage a demand function for the total electricity consumption is estimated; and in stage II a homothetic conditional demand system for electricity demand by time-of-use is specified.

The aggregate demand function becomes: L h; (mh,p, ch )= F; (p,G1 (ml,ml,· .. ,mH,cl,cl ""'C H ), ... 39) See Deaton and Muellbauer (\980a). 38 where F j is a function giving the aggregate demand for good i and Gk is a non-constant symmetric function of the mh and ch • Symmetry of the functions Gk means that the labelling of individuals is not important. Lau refers to the functions Gk as index functions, which can be interpreted as statistics describing the population. 21 From an economic point of view this theorem has the following striking implications: 1.

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