Estimating the impact of time-of-use pricing on Irish electricity demand
AbstractElectricity demand traditionally exhibits a substantial peak during a small number of hours each day. Policymakers are aware of the potential efficiency savings that may be generated from a shift in energy consumption away from peak times. Smart meters, in conjunction with time-of-use (TOU) pricing, can facilitate an improvement in energy efficiency by providing consumers with enhanced information about electricity consumption and costs, and thereby encourage a shift away from consumption during peak hours. In 2009-10, the Irish Commission for Energy Regulation (CER) co-ordinated a randomised controlled trial in the Irish residential electricity market. Smart meters, which replaced the existing mechanical meter readers, were introduced in approximately 5,000 households. Participants were divided into control and treatment groups, with treatment groups exposed to a variety of TOU tariffs and information stimuli (in-home display (IHD) units, monthly billing, etc.). Data was collected over approximately 18 months, with the first half year being used as a control period. This paper analyses the response of Irish households to the introduction of TOU tariffs and information stimuli. We examine how households responded to the different TOU tariffs, at different times of the day (peak, day and night) and in conjunction with different information stimuli. Finally, we examine the variation in our results across households of differing socio-economic status (as proxied by education levels). We find that TOU tariffs and information stimuli have a significant effect in reducing electricity consumption in Ireland, particularly during peak hours. However, while households reduce peak demand significantly after the introduction of TOU tariffs and associated information, there is little incremental response to increasing differentials between peak and off-peak prices.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39971.
Date of creation: Jul 2012
Date of revision:
household electricity demand; electricity pricing; smart metering;
Find related papers by JEL classification:
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anna Alberini & Will Gans & Daniel Velez-Lopez, 2011.
"Residential Consumption of Gas and Electricity in the U.S.: The Role of Prices and Income,"
2011.01, Fondazione Eni Enrico Mattei.
- Alberini, Anna & Gans, Will & Velez-Lopez, Daniel, 2011. "Residential consumption of gas and electricity in the U.S.: The role of prices and income," Energy Economics, Elsevier, vol. 33(5), pages 870-881, September.
- Anna Alberini & Gans Will & Daniel Lopez-Velez, 2010. "Residential Consumption of Gas and Electricity in the U.S.: The Role of Prices and Income," CEPE Working paper series 10-77, CEPE Center for Energy Policy and Economics, ETH Zurich.
- Massimo, Filippini, 2011.
"Short- and long-run time-of-use price elasticities in Swiss residential electricity demand,"
Elsevier, vol. 39(10), pages 5811-5817, October.
- Massimo Filippini, 2010. "Short and long-run time-of-use price elasticities in Swiss residential electricity demand," CEPE Working paper series 10-76, CEPE Center for Energy Policy and Economics, ETH Zurich.
- Dulleck, Uwe & Kaufmann, Sylvia, 2004. "Do customer information programs reduce household electricity demand?--the Irish program," Energy Policy, Elsevier, vol. 32(8), pages 1025-1032, June.
- Matsukawa, Isamu, 2001. "Household Response to Optional Peak-Load Pricing of Electricity," Journal of Regulatory Economics, Springer, vol. 20(3), pages 249-67, November.
- Aubin, Christophe & Fougère, Denis & Husson, Emmanuel & Ivaldi, Marc, 1994.
"Real-Time Pricing of Electricity of Residential Customers: Econometric Analysis of an Experiment,"
IDEI Working Papers
46, Institut d'Économie Industrielle (IDEI), Toulouse.
- Aubin, Christophe, et al, 1995. "Real-Time Pricing of Electricity for Residential Customers: Econometric Analysis of an Experiment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(S), pages S171-91, Suppl. De.
- Filippini, Massimo, 1995. "Swiss residential demand for electricity by time-of-use," Resource and Energy Economics, Elsevier, vol. 17(3), pages 281-290, November.
- Pollitt, M. G. & Shaorshadze, I., 2011. "The Role of Behavioural Economics in Energy and Climate Policy," Cambridge Working Papers in Economics 1165, Faculty of Economics, University of Cambridge.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.