Lars Persson, Amin Karimu and Runar Brännlund all attended the 41st International Association of Energy Economics international conference in Groningen, Netherlands in June. Both Lars and Amin talked about issues related to residential electricity demand. (To read more, click on headline)
The title for Amin’s talk was; Understanding Residential Within-Day Electricity Demand, and was based on current research with Chandra Kiran and Mattias Vesterberg. The objective of the research on Dynamic pricing of electricity: Some implications for Swedish households is to assess if there are significant substitutions across hours of electricity demand by Swedish households, and if so, whether the substitutions are strong enough to induce households to shift their electricity demand from peak periods to off-peak periods in a day. The finding from the study suggest some load shifting from peak to off-peak hours when a dynamic pricing scheme is adopted. This implies a smoothening of the load profile due to such a pricing scheme. This however has a welfare implication on the household’s due to such a price change. Specifically, they find the median household’s cost of living due to adopting a dynamic pricing scheme to increase less than 1 SEK per day, which is around 5% of the daily cost of electricity.
The title for Lars talk was; Peak load habits for sale? Soft load control and consumer preferences on the electricity market, and was based on research together with Runar Brännlund and Thomas Broberg. From a choice experiment setting with choices between hypothetical electricity contracts, the paper estimates lost values due to various restrictions on household electricity use involving behavior adaptation. This involves both “soft restrictions” and full “black-outs”. The results are, among other things, that policies aiming at stimulating behavioral changes are costly and it is far from obvious that demand response requiring behavioral adaptation is more cost effective than supply response (i.e., increased production of electricity).