The objective of this paper is an analytical exploration of the problem of price elasticity of energy demand in multi-stage energy conversion systems. The paper describes in some detail an analytical model of energy demand in such systems. Under a clearly stated set of assumptions. the model makes it possible to explore both the impacts of the number of sub-systems, and of varying sub-system elasticities on overall system elasticity. The analysis suggests that overall price elasticity of energy demand for such systems will tend asymptotically to unity, as the number of sub-systems increases. (C) 2003 Published by Elsevier Science Ltd.