Effects of Variable Electricity Rates on the Behavior of Residential Customers

Poster presentation at the IRES in Düsseldorf on March 14, 2018

IRES presented.weissThe expansion of renewable energy generation leads to an increasing volatility of supply in electricity networks. Aiming at grid relief, utilities offer variable electricity rates to industrial clients in order to incentivize demand response. Potentially, variable electricity rates could also be an effective tool to incentivize residential customers to shift electricity consumption according to the current grid state. Different pilot projects show that variable rates are mostly well accepted by a majority of customers, but partly yield contradictory results regarding the reaction to these rates.

Complementing previous research, a survey among 130 household customers was conducted to determine the selection criteria for electricity rates, the preferred rate structures and price spreads as well as the actual reaction of customers to variable rates.

The results suggest that, in addition to monetary factors, particularly the comprehensibility of the rate structure and its integrability into the customers’ everyday life are important selection criteria. The participants show strong interest in variable electricity rates, particularly rates with three price levels and a price spread around 30ct/kWh, but want to be informed about the electricity price schedule at least one day before. The willingness to shift consumption largely depends on the potential monetary savings and varies considerably within the group of participants. However, a large majority of them accept automatic control of their appliances.

These results allow modelling and simulating the expected impact of variable rates in the energy market and thus, the potential benefits for the energy system.

 

For further information or access to survey data please contact us!

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