Reduction of energy poverty in Mexico by applying an optimization model to residential energy tariffs

Abstract

The growing energy consumption of the different sectors of the population can cause socioeconomic inequalities such as energy poverty. Recent studies indicate that this type of poverty occurs in households that spend 10% or more of their economic income to pay for this service because of energy use patterns or its cost. In Mexico, the structure of the electricity tariff in the housing sector causes the poorest decile to spend up to 23% of their income to pay for electricity service during the months of beginning or end of summer. This research proposes a mathematical model to modify the way in which these rates are applied to the Mexican residential sector, with which the price shock is reduced in these transition months. The model consists of an equation that determines the electrical cost proportional to the days and rates of the months that make up the measured period. The results show a reduction in energy poverty in 166,318 households, as well as an 18% increase in the correlation between energy consumption and the cost of energy for 9,535,367 households. This proposal provides better energy justice conditions for 25% of the country’s residential users, mainly for those located in places with high ambient temperatures during summer.

Keywords

• Energy pricing
• Energy poverty
• Billing provisions