EconPapers    
Economics at your fingertips  
 

Construction of a fuel demand function portraying interfuel substitution, a system dynamics approach

Ibrahim Abada, Vincent Briat and Olivier Massol

Energy, 2013, vol. 49, issue C, 240-251

Abstract: Most of the recent numerical market partial equilibrium models of natural gas markets use imperfect competition assumptions. These models are typically embedded with a simple representation of the demand side, usually a single-variable, linear, inverse demand function, that does not capture any dynamic adjustment to past prices or energy substitution. To remedy this, we report an effort to construct an enhanced functional specification using the system dynamics-based model of [27,28]. This putty-clay model uses a vintage representation of capital stock to capture the effect of both past and current energy prices on fuel consumption. Using a re-calibrated version of this model, we first confirm the pertinence of this modeling framework to represent interfuel substitution at different fuel prices in the industrial sector. Building on these findings, a dynamic functional specification of the demand function for natural gas is then proposed and calibrated.

Keywords: Energy demand function; System dynamics; Natural gas markets modeling (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S036054421200850X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Construction of a fuel demand function portraying interfuel substitution, a system dynamics approach (2011) Downloads
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:49:y:2013:i:c:p:240-251

DOI: 10.1016/j.energy.2012.10.063

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 Haili He ().

 
Page updated 2021-01-19
Handle: RePEc:eee:energy:v:49:y:2013:i:c:p:240-251