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Advances in Energy Systems
book

Advances in Energy Systems

by Peter D. Lund, John A. Byrne, Reinhard Haas, Damian Flynn
April 2019
Intermediate to advanced content levelIntermediate to advanced
568 pages
27h 45m
English
Wiley
Content preview from Advances in Energy Systems

32Household Electricity Consumers' Incentive to Choose Dynamic Pricing Under Different Taxation Schemes

Jonas Katz1, Lena Kitzing1, Sascha T. Schröder1, F. M. Andersen1, P. E. Morthorst1 and Morten Stryg2

1 Department of Management Engineering, Technical University of Denmark, Kgs. Lyngby, Denmark

2 Dansk Energi, Frederiksberg, Denmark

Dynamic pricing of retail electricity, as opposed to the widely applied average pricing, has often been proposed to enhance economic efficiency through demand response. The development of variable production from renewable energies and expectations about the installation of heat pumps and electric vehicles has now reinforced interest in flexible demand and dynamic pricing. With a roll‐out of smart metering one important technical hurdle is going to be cleared, and dynamic retail pricing may soon become an eligible option for many households. We quantify the potential incentives to adopt new pricing schemes using exemplary Danish data. Until now, limited activity of household consumers on retail markets indicates that switching supplier or contract is perceived costly. We apply the concept of switching costs to explain this hesitant behavior, and use it to estimate a threshold level based on recent observations in the Danish market. We calculate potential savings from dynamic pricing and show how the choice of electricity taxation technique may hamper or enhance potential benefits. In the light of switching costs, our results suggest that the combination ...

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Publisher Resources

ISBN: 9781119508281Purchase book