The potential for segmentation of the retail market for electricity in Ireland

Marie Hyland, Eimear Leahy, Richard S J Tol*

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

We estimate the gross margin that is earned from the supply of electricity to households in Ireland. Using half hourly electricity demand data, the system marginal price (also called the wholesale price) and the retail price of electricity, we analyse how the gross margin varies across customers with different characteristics. The wholesale price varies throughout the day, thus, the time at which electricity is used affects the gross margin. The main factor in determining gross margin, however, is the level of demand. The highest gross margins are earned from supplying customers that have the following characteristics: being aged between 46 and 55, having a household income of at least €75,000 per annum, being self-employed, having a third-level education, having a professional or managerial occupation, living in a household with seven or more people, living in a detached house, having at least five bedrooms or being a mortgage holder. An OLS regression shows that gross margin is partly explained by the energy conservation measures which are present in a household; the number of household members; the number of bedrooms; age; occupation; and accommodation-type.

Original languageEnglish
Pages (from-to)349-359
Number of pages11
JournalEnergy Policy
Volume61
DOIs
Publication statusPublished - Oct 2013

Keywords

  • Electricity demand
  • Market segmentation
  • Smart meters

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