Pricing residential load shedding as a call option

Charles G Geiss

Energy, 1998, vol. 23, issue 4, 309-316

Abstract: Air-conditioner power-interruption programs are shown by simulation to reduce the peaks of a utility load profile. The value of this load-shifting capability is determined by a financial call option pricing model. The air-conditioner interruption option is determined to be worth about $0.65 per summer month to a representative utility; but this value varies widely with costs, volatility of demand, and the skill of implementation by utility managers. The interruption option is given an imputed value derived from the share prices of the utility. This imputed value approximates the value obtained by simulation.

Date: 1998
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544297000911
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:23:y:1998:i:4:p:309-316

DOI: 10.1016/S0360-5442(97)00091-1

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().