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Smart Meter Devices and The Effect of Feedback on Residential Electricity Consumption: Evidence from a Natural Experiment in Northern Ireland

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  • Gans, Will
  • Alberini, Anna
  • Longo, Alberto

Abstract

Using a unique set of data and exploiting a large-scale natural experiment, we estimate the effect of real-time usage information on residential electricity consumption in Northern Ireland. Starting in April 2002, the utility replaced prepayment meters with “smart” meters that allow the consumer to track usage in real-time. We rely on this event, account for the endogeneity of price and plan with consumption through a plan selection correction term, and find that the provision of information is associated with a decline in electricity consumption of up to 20%. We find that the reduction is robust to different specifications, selection-bias correction methods and subsamples of the original data. At £15-17 per tonne of CO2e (2009£), the smart meter program delivers cost-effective reductions in carbon dioxide emissions.

Suggested Citation

  • Gans, Will & Alberini, Anna & Longo, Alberto, 2011. "Smart Meter Devices and The Effect of Feedback on Residential Electricity Consumption: Evidence from a Natural Experiment in Northern Ireland," Energy: Resources and Markets 108202, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemer:108202
    DOI: 10.22004/ag.econ.108202
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    Cited by:

    1. Gans, Will & Alberini, Anna & Longo, Alberto, 2013. "Smart meter devices and the effect of feedback on residential electricity consumption: Evidence from a natural experiment in Northern Ireland," Energy Economics, Elsevier, vol. 36(C), pages 729-743.
    2. Rihar, Miha & Hrovatin, Nevenka & Zoric, Jelena, 2015. "Household valuation of smart-home functionalities in Slovenia," Utilities Policy, Elsevier, vol. 33(C), pages 42-53.
    3. Römer, Benedikt & Reichhart, Philipp & Kranz, Johann & Picot, Arnold, 2012. "The role of smart metering and decentralized electricity storage for smart grids: The importance of positive externalities," Energy Policy, Elsevier, vol. 50(C), pages 486-495.
    4. Cossent, Rafael & Gómez, Tomás & Olmos, Luis, 2011. "Large-scale integration of renewable and distributed generation of electricity in Spain: Current situation and future needs," Energy Policy, Elsevier, vol. 39(12), pages 8078-8087.
    5. Guo, Zhifeng & Zhou, Kaile & Zhang, Chi & Lu, Xinhui & Chen, Wen & Yang, Shanlin, 2018. "Residential electricity consumption behavior: Influencing factors, related theories and intervention strategies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 399-412.
    6. Valeria Di Cosmo, Sean Lyons, and Anne Nolan, 2014. "Estimating the Impact of Time-of-Use Pricing on Irish Electricity Demand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    7. López-Rodríguez, M.A. & Santiago, I. & Trillo-Montero, D. & Torriti, J. & Moreno-Munoz, A., 2013. "Analysis and modeling of active occupancy of the residential sector in Spain: An indicator of residential electricity consumption," Energy Policy, Elsevier, vol. 62(C), pages 742-751.

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    Resource /Energy Economics and Policy;

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