To accelerate the transition to carbon neutrality, metropolitan authorities have heavily subsidized public DC fast-charging infrastructure. However, during peak afternoon hours, the surge in electricity demand threatens grid stability. In response, municipal operators have trialled dynamic pricing models, imposing a peak-time surcharge.
A dynamic pricing adjustment that increases the average retail price per kilowatt-hour (kWh) at public rapid chargers by 25% reduces energy consumption by 15% among commercial fleet operators, who rely on rapid turnaround times to maintain schedules. In contrast, the same price increase reduces energy consumption by 35% among private individual vehicle owners, who have greater flexibility to charge overnight at home or use slower AC destination chargers.
With reference to Extract C, calculate the price elasticity of demand (PED) for rapid charging electricity among commercial fleet operators and among private individual vehicle owners. You are advised to show your working.
