Load-shift incentives for household demand response: Evaluation of hourly dynamic pricing and rebate schemes in a wind-based electricity system

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    Abstract

    Applying a partial equilibrium model of the electricity market we analyse effects of exposing household electricity customers to retail products with variable pricing. Both short-term and long-term effects of exposing customers to hourly spot market prices and a simpler rebate scheme are analysed under scenarios with large shares of wind power in a Danish case study. Our results indicate strategies that could be favourable in ensuring high adoption of products and efficient response by households. We find that simple pricing schemes, though economically less efficient, could become important in an early phase to initialise the development of household demand response. At a later point, when long-term dynamics take effect, a larger effort should be made to shift consumers onto real-time rates, and an increased focus on overall adoption of variable pricing will be required. Another finding is that demand response under variable pricing makes wind power more valuable. These gains in value reduce the need for support, and could be redistributed in further support of demand response.
    Original languageEnglish
    JournalEnergy
    Volume115
    Issue number3
    Pages (from-to)1602-1616
    ISSN0360-5442
    DOIs
    Publication statusPublished - 2016

    Cite this

    @article{c5c08a9d2d604f168a88abb0797d9a96,
    title = "Load-shift incentives for household demand response: Evaluation of hourly dynamic pricing and rebate schemes in a wind-based electricity system",
    abstract = "Applying a partial equilibrium model of the electricity market we analyse effects of exposing household electricity customers to retail products with variable pricing. Both short-term and long-term effects of exposing customers to hourly spot market prices and a simpler rebate scheme are analysed under scenarios with large shares of wind power in a Danish case study. Our results indicate strategies that could be favourable in ensuring high adoption of products and efficient response by households. We find that simple pricing schemes, though economically less efficient, could become important in an early phase to initialise the development of household demand response. At a later point, when long-term dynamics take effect, a larger effort should be made to shift consumers onto real-time rates, and an increased focus on overall adoption of variable pricing will be required. Another finding is that demand response under variable pricing makes wind power more valuable. These gains in value reduce the need for support, and could be redistributed in further support of demand response.",
    author = "Jonas Katz and {M{\o}ller Andersen}, Frits and Morthorst, {Poul Erik}",
    year = "2016",
    doi = "10.1016/j.energy.2016.07.084",
    language = "English",
    volume = "115",
    pages = "1602--1616",
    journal = "Energy",
    issn = "0360-5442",
    publisher = "Elsevier",
    number = "3",

    }

    Load-shift incentives for household demand response: Evaluation of hourly dynamic pricing and rebate schemes in a wind-based electricity system. / Katz, Jonas; Møller Andersen, Frits; Morthorst, Poul Erik.

    In: Energy, Vol. 115, No. 3, 2016, p. 1602-1616.

    Research output: Contribution to journalJournal articleResearchpeer-review

    TY - JOUR

    T1 - Load-shift incentives for household demand response: Evaluation of hourly dynamic pricing and rebate schemes in a wind-based electricity system

    AU - Katz, Jonas

    AU - Møller Andersen, Frits

    AU - Morthorst, Poul Erik

    PY - 2016

    Y1 - 2016

    N2 - Applying a partial equilibrium model of the electricity market we analyse effects of exposing household electricity customers to retail products with variable pricing. Both short-term and long-term effects of exposing customers to hourly spot market prices and a simpler rebate scheme are analysed under scenarios with large shares of wind power in a Danish case study. Our results indicate strategies that could be favourable in ensuring high adoption of products and efficient response by households. We find that simple pricing schemes, though economically less efficient, could become important in an early phase to initialise the development of household demand response. At a later point, when long-term dynamics take effect, a larger effort should be made to shift consumers onto real-time rates, and an increased focus on overall adoption of variable pricing will be required. Another finding is that demand response under variable pricing makes wind power more valuable. These gains in value reduce the need for support, and could be redistributed in further support of demand response.

    AB - Applying a partial equilibrium model of the electricity market we analyse effects of exposing household electricity customers to retail products with variable pricing. Both short-term and long-term effects of exposing customers to hourly spot market prices and a simpler rebate scheme are analysed under scenarios with large shares of wind power in a Danish case study. Our results indicate strategies that could be favourable in ensuring high adoption of products and efficient response by households. We find that simple pricing schemes, though economically less efficient, could become important in an early phase to initialise the development of household demand response. At a later point, when long-term dynamics take effect, a larger effort should be made to shift consumers onto real-time rates, and an increased focus on overall adoption of variable pricing will be required. Another finding is that demand response under variable pricing makes wind power more valuable. These gains in value reduce the need for support, and could be redistributed in further support of demand response.

    U2 - 10.1016/j.energy.2016.07.084

    DO - 10.1016/j.energy.2016.07.084

    M3 - Journal article

    VL - 115

    SP - 1602

    EP - 1616

    JO - Energy

    JF - Energy

    SN - 0360-5442

    IS - 3

    ER -