Elsevier

Applied Energy

Volume 313, 1 May 2022, 118848
Applied Energy

Future assessment of the impact of the COVID-19 pandemic on the electricity market based on a stochastic socioeconomic model

https://doi.org/10.1016/j.apenergy.2022.118848Get rights and content

Highlights

  • Combination of a socioeconomic market model and a risk assessment technique.

  • Past/future analysis of the impact of the COVID-19 pandemic on the electricity market.

  • Proposal of a stochastic/robust public policy to mitigate the impact of the pandemic.

Abstract

This paper proposes a time-series stochastic socioeconomic model for analyzing the impact of the pandemic on the regulated distribution electricity market. The proposed methodology combines the optimized tariff model (socioeconomic market model) and the random walk concept (risk assessment technique) to ensure robustness/accuracy. The model enables both a past and future analysis of the impact of the pandemic, which is essential to prepare regulatory agencies beforehand and allow enough time for the development of efficient public policies. By applying it to six Brazilian concession areas, results demonstrate that consumers have been/will be heavily affected in general, mainly due to the high electricity tariffs that took place with the pandemic, overcoming the natural trend of the market. In contrast, the model demonstrates that the pandemic did not/will not significantly harm power distribution companies in general, mainly due to the loan granted by the regulator agency, named COVID-account. Socioeconomic welfare losses averaging 500 (MR$/month) are estimated for the equivalent concession area, i.e., the sum of the six analyzed concession areas. Furthermore, this paper proposes a stochastic optimization problem to mitigate the impact of the pandemic on the electricity market over time, considering the interests of consumers, power distribution companies, and the government. Results demonstrate that it is successful as the tariffs provided by the algorithm compensate for the reduction in demand while increasing the socioeconomic welfare of the market.

Keywords

COVID-19 pandemic
Public policies
Regulated electricity market
Risk assessment
Stochastic socioeconomic model

Abbreviations

AEGs
autonomous energy grids
ANEEL
National Electricity Agency (Brazilian regulatory agency)
CGE
computable general equilibrium
CNN
convolutional neural network
DG
distributed generation
ECA
economic consumer added (consumers' surplus)
ESS
energy storage systems
EVA
economic value added (regulated power distribution company's surplus)
EWA
economic wealth added (socioeconomic welfare)
FEE
financial economical equilibrium
GDP
gross domestic product
HVAC
heating, ventilation, and air-conditioning
IOT
internet of things
LEAP
Low Emissions Analysis Platform
ML
machine learning
MR$
Brazilian currency multiplied by 106
PM
particulate matter
TAROT
optimized tariff
VaR
value at risk

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