Electricity saving in households due to the market liberalization and change in the consumer behaviour

Abstract

In case of opening the electricity market, various factors interact with each other. Although research has been done on various factors affecting the liberal electricity market, little attention has been paid to studying the dynamic relations between the actors involved in the liberal electricity market and projections on electricity consumption in households. The main aim of the research is to explore both short- and long-term effects on the electricity consumption at liberal market conditions by modelling various development scenarios. The electricity market in operation in Latvia was used as the case study. For the simulation of electricity market liberalization, system dynamics has been chosen. This method can determine electricity savings in case of electricity market opening, because system dynamics allows conducting simulation of complex systems and analysing the obtained data to forecast probability of the development of several scenarios. Obtained results show that cumulative electricity savings in households could reach 560 GWh by the end of 2020 due to the opening of the electricity market, implementation of energy saving measures and other reasons. In case of scenario analysis using the change of consumption behaviour, it was obtained that the cumulative electricity saving could be almost twice as big if the majority of households were guided by the environmental concerns. Although the system dynamics model was based on the Latvian case study, its general application to other countries and electricity markets is also possible.