Iranian Energy Economics

Determination of Optimal Electricity Price: A Case Study of the Tavanir Co

Document Type : Research Paper

Authors

Farhad Rahbar 1
Kioumars Heydari 2
hadi ghahramani 3

1 Faculty Member of Faculty of Economics, University of Tehran

2 Assistant Professor, Faculty Member and Director of the Department of Electrical and Power Economics

3 MSc in Energy Economics, Faculty of Economics of University of Tehran

https://doi.org/10.22054/jiee.2018.8973
Abstract
Correct pricing power of the most important tools for comprehensive planning for safe and efficient use of electricity (consumption efficiency) and integrity investments to meet electricity demand (production efficiency) is considered. The purpose of efficiency Justifies pricing based on the first best (Price equal to marginal cost). on the other hand, Pricing based on marginal cost, resulting in a deficit (loss) for the firm if the Industry investigated is facing with economies of scale that should be covered.
In the present study, the total cost of the long-term function for the electricity industry over the period 1373-1390 to form translog and directly (using the price of inputs and outputs industry) is estimated. Further, by extracting the optimal price based on different scenarios, the deficit resulting from this type of pricing is calculated and the share of the deficit in each of the sectors of production of transmission and distribution is determined. Ramsey pricing, block pricing, Repayment of the facilities derived from government In front obligations of the state for the difference in rates, using Privatization capacity and The installments of private sector With their claim the sale of electricity to the state-owned holding companies are the main solutions that In order to offset that loss, have been proposed.

Keywords

optimal price
the marginal cost
economies of scale
Iranian Energy Economics
Volume 6, Issue 24 - Serial Number 4
winter
Autumn 2017
Pages 57-88

  • Receive Date 22 January 2018
  • Accept Date 11 September 2018
  • First Publish Date 11 September 2018
  • Publish Date 23 September 2017

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