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Utility Customer Supply of Demand Response Capacity

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  • James I. Stewart

Abstract

This research investigates utility customer supply of demand response capacity to electric utilities. Using panel data on annual utility demand response capacity and capacity payments between 2010 and 2016, I estimate the long-run price elasticity of supply of demand response capacity from residential, commercial, and industrial customers. The supply of demand response capacity was price-inelastic, with elasticities of 0.5 for residential customers, 0.6 for commercial customers, and 0.4 for industrial customers. These estimates are long-run supply elasticities because utility customers could enter or exit demand response markets. Also, residential customer supply of demand response capacity was heterogeneous, affected by characteristics such as customer education, urban residency, and home space heating fuel. These findings will be of interest to regulators, utility resource planners, and program administrators who want to increase demand response capacity.

Suggested Citation

  • James I. Stewart, 2020. "Utility Customer Supply of Demand Response Capacity," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 129-152.
    • Handle: RePEc:aen:journl:ej41-4-stewart
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    Cited by:

    1. Adélaïde Fadhuile & Daniel Llerena & Béatrice Roussillon, 2023. "Intrinsic motivation to promote the development of renewable energy: a field experiment from household demand," Working Papers 2023-01, Grenoble Applied Economics Laboratory (GAEL).
    2. Mohseni, Soheil & Brent, Alan C. & Kelly, Scott & Browne, Will N., 2022. "Demand response-integrated investment and operational planning of renewable and sustainable energy systems considering forecast uncertainties: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    3. Joseph Nyangon & John Byrne, 2023. "Estimating the impacts of natural gas power generation growth on solar electricity development: PJM's evolving resource mix and ramping capability," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 12(1), January.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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