Households' self-selection of a dynamic electricity tariff
Working paper
Åpne
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http://hdl.handle.net/11250/180267Utgivelsesdato
2006Metadata
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- Discussion Papers [1002]
Sammendrag
Abstract:
Offering electricity consumers time-differentiated tariffs may increase demand responsiveness,
thereby reducing peak consumption. However, one concern is that time-differentiated tariffs may also
attract consumers who benefit because of their consumption pattern, even without a corresponding
demand response. A discrete choice model applied to data from a residential dynamic pricing
experiment indicates that higher demand flexibility increases the propensity of a household to select
dynamic tariffs, while favourable consumption patterns do not influence the tariff choice. The offering
of dynamic time-differentiated tariffs is then likely to increase the demand response among
residential consumers.
Keywords: demand response, dynamic pricing, electricity tariff, self-selection, rate option.