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Who gains from hourly time‐of‐use retail prices on electricity? An analysis of consumption profiles for categories of Danish electricity customers

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  • F. M. Andersen
  • H. V. Larsen
  • L. Kitzing
  • P. E. Morthorst

Abstract

Studies of the aggregated hourly electricity load in geographical areas typically show a systematic variation over the day, the week, and seasons. With hourly metering of individual customers, data for individual consumption profiles have become available. Looking into these data we show that consumption profiles for specific categories of customers are equally systematic but quite distinct for different categories of customers. That is, different categories of customers contribute quite differently to the aggregated load profile. Coupling consumption profiles with hourly market prices which also include a systematic component in the hourly variation, we show that customers with different consumption profiles experience different average cost of their electricity consumption when billed according to hourly time‐of‐use prices. Thus, some categories of customers stand to gain from time‐of‐use pricing, while others stand to lose. In Denmark, typically industry, private services and households stand to lose, whereas agriculture and public services stand to gain from time‐of‐use pricing. However, differences within categories of customers are considerable and, for example, industrial companies running 24 h a day tend to gain from a time‐of‐use pricing. WIREs Energy Environ 2014, 3:582–593. doi: 10.1002/wene.120 This article is categorized under: Energy Infrastructure > Economics and Policy Energy Policy and Planning > Economics and Policy

Suggested Citation

  • F. M. Andersen & H. V. Larsen & L. Kitzing & P. E. Morthorst, 2014. "Who gains from hourly time‐of‐use retail prices on electricity? An analysis of consumption profiles for categories of Danish electricity customers," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 3(6), pages 582-593, November.
    • Handle: RePEc:bla:wireae:v:3:y:2014:i:6:p:582-593
    DOI: 10.1002/wene.120
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    References listed on IDEAS

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    4. Andersen, F.M. & Larsen, H.V. & Gaardestrup, R.B., 2013. "Long term forecasting of hourly electricity consumption in local areas in Denmark," Applied Energy, Elsevier, vol. 110(C), pages 147-162.
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    Cited by:

    1. Gambardella, Christian & Pahle, Michael, 2018. "Time-varying electricity pricing and consumer heterogeneity: Welfare and distributional effects with variable renewable supply," Energy Economics, Elsevier, vol. 76(C), pages 257-273.
    2. Andersen, F.M. & Gunkel, P.A. & Jacobsen, H.K. & Kitzing, L., 2021. "Residential electricity consumption and household characteristics: An econometric analysis of Danish smart-meter data," Energy Economics, Elsevier, vol. 100(C).
    3. Jessica Thomsen & Christoph Weber, "undated". "How the design of retail prices, network charges, and levies affects profitability and operation of small-scale PV-Battery Storage Systems," EWL Working Papers 1903, University of Duisburg-Essen, Chair for Management Science and Energy Economics.
    4. Klinge Jacobsen, Henrik & Juul, Nina, 2015. "Demand side management - electricity savings in Danish households reduce load variation, capacity requirements and associated emission," MPRA Paper 80060, University Library of Munich, Germany.
    5. Andersen, F.M. & Larsen, H.V. & Juul, N. & Gaardestrup, R.B., 2014. "Differentiated long term projections of the hourly electricity consumption in local areas. The case of Denmark West," Applied Energy, Elsevier, vol. 135(C), pages 523-538.

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