Electricity Demand Elasticity, Mobility, and COVID-19 Contagion Nexus in the Italian Day-Ahead Electricity Market

Carlo Andrea Bollino () and Maria Chiara D’Errico
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Carlo Andrea Bollino: Perugia Energy Environment Research Center, 06123 Perugia, Italy
Maria Chiara D’Errico: Department of Economics, University of Perugia, 06123 Perugia, Italy

Energies, 2022, vol. 15, issue 20, 1-26

Abstract: The magnitude of the impact of the pandemic on key variables, such as electricity demand, mobility of people and number of COVID-19 hospitalization cases, has been unprecedented. Existing economic models have not estimated the impact of sucokh events. This paper fills this gap, investigating the nexus among electricity demand elasticity, shifting behaviors of mobility and COVID-19 contagion with econometric estimation techniques. Firstly, using the single bids to purchase recorded in the Italian day-ahead wholesale electricity market in 2020, we estimate hourly electricity demand and price elasticity directly from short-run consumer behavior. Then, we analyze the effects of the main aspects of the pandemic, the health situation and the mobility contraction at the national level, on the estimated price elasticities. The period of heavy lockdown between 10 March and 3 June recorded a reduction in the price elasticity of electricity demand. However, when the pandemic broke out again at the beginning of October, elasticity increased, highlighting how companies and economic activities had adopted countermeasures to avoid the arrest of the economy and, consequently, the sharp contraction in electricity demand.

Keywords: energy–mobility–COVID nexus; electricity demand; COVID pandemia; lockdown effect (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
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