Mattias dispDeregulation and technological advancement have provided the possibilities and the larger share of intermittent power the need for demand flexibility. Policy makers hope that households will be interested in demand flexibility and change their ways. However, if the incentives for behavioural change are too small, the households will fail to respond.

Dr. Mattias Vesterberg successfully defended his thesis: Power to the people - Electricity demand and household behaviour, on February 24, 2017. Mattias partly focused on real time pricing of electricity, trying to figure out the potential for dynamic pricing to increase demand flexibility on the Swedish electricity market. Using unique Swedish household level data, his research sheds light on the extent to which price-driven policies can incentivize behavioural changes in residential electricity consumption. While technologies and market structures already allow many consumers to adjust their consumption according to electricity availability, only few actively do so. Ingrained consumer patterns are difficult to change and the gains from switching to flexible electricity contracts seem too small.

In the thesis, Mattias provides examples as to why households might be unwilling or not able to engage in demand flexibility. Exogenous restrictions like working hours, outdoor temperature and limited daylight will have us away from home certain hours, turn on the heat when cold and turn on lights at dusk. Monetary incentives to change our behaviour are to small and there might be some transaction cost associated with increased demand flexibility. The knowledge on electricity prices and usage is understandably not high among households, only a small part of the household budget goes to electricity.

However, Mattias feels that we might have yet to see the full potential of the technological advancements and that more information to the households could facilitate a demand flexibility. But until then Mattias wishes that policy makers base their decision on reality and not an image of the presently non-existing active consumer.

Read the thesis: Power to the people - Electricity demand and household behaviour


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