Electricity Demand Response to Price Changes in Sri Lanka

This study investigates the responsiveness of electricity consumers to the price changes in Sri Lanka, by means of estimating the short-term price elasticity of demand. The electricity consumption data for a period of 6 months, from a selected consumer sample, across a tariff increase event is considered. The findings of the study are categorized based on the consumer groups, namely ‘Household’, ‘Commercial’ and ‘Industrial’. The direct price elasticity is observed to be highest for the ‘Industrial’ consumer group, compared to the others. In addition to the above, the peak to non-peak substitution with price is also studied for ‘Industrial’ and ‘Commercial’ consumer groups. It shows that the ‘Industrial’ consumers are more responsive to peak, non-peak price variations, in comparison to ‘Commercial’ consumers.