Economics of Electricity Consumption: A Literature Review

Abstract

Electricity consumption is determined by the use of electronic gadgets, income level of family members, choice of connection and size of the houses. In India, the energy use is at disaggregate level. Electricity is necessary in various types of activities and in each it takes a different character. There is a strong two-way relationship between economic development and energy consumption. The dynamics of growth in one sector with more residential electricity brings realistic potential for efficiency. The increasing availability and usefulness of electricity set the limit to its requirements in a region and the actual level of its consumption at any given time depends on a number of socio-economic factors which are usually not taken into account in making estimates of future requirements. In India, the growth in demand has exceeded the growth in generation capacity as a result the country is facing acute energy and peak shortages. The studies also discuss possible pricing options to bring about more efficient use of limited generated capacity as well as addressing the issue of equity. Some studies also tried to estimate the final demand which is price sensitive for both residential and industrial consumers. This study attempted to bring out literature reviews covering Studies on Electricity Economics; Studies on Household Electricity Consumption; and Studies on Managing Electricity Consumption.