IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v38y2010i10p6222-6231.html
   My bibliography  Save this article

Unlocking the [euro]53 billion savings from smart meters in the EU: How increasing the adoption of dynamic tariffs could make or break the EU's smart grid investment

Author

Listed:
  • Faruqui, Ahmad
  • Harris, Dan
  • Hledik, Ryan

Abstract

We estimate the cost of installing smart meters in the EU to be [euro]51 billion, and that operational savings will be worth between [euro]26 and 41 billion, leaving a gap of [euro]10-25 billion between benefits and costs. Smart meters can fill this gap because they enable the provision of dynamic pricing, which reduces peak demand and lowers the need for building and running expensive peaking power plants. The present value of savings in peaking infrastructure could be as high as [euro]67 billion for the EU if policy-makers can overcome barriers to consumers adopting dynamic tariffs, but only [euro]14 billion otherwise. We outline a number of ways to increase the adoption of dynamic tariffs.

Suggested Citation

  • Faruqui, Ahmad & Harris, Dan & Hledik, Ryan, 2010. "Unlocking the [euro]53 billion savings from smart meters in the EU: How increasing the adoption of dynamic tariffs could make or break the EU's smart grid investment," Energy Policy, Elsevier, vol. 38(10), pages 6222-6231, October.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:10:p:6222-6231
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(10)00473-8
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Faruqui, Ahmad & Hledik, Ryan & Tsoukalis, John, 2009. "The Power of Dynamic Pricing," The Electricity Journal, Elsevier, vol. 22(3), pages 42-56, April.
    2. Faruqui, Ahmad & Sergici, Sanem & Sharif, Ahmed, 2010. "The impact of informational feedback on energy consumption—A survey of the experimental evidence," Energy, Elsevier, vol. 35(4), pages 1598-1608.
    3. Faruqui, Ahmad & George, Stephen, 2005. "Quantifying Customer Response to Dynamic Pricing," The Electricity Journal, Elsevier, vol. 18(4), pages 53-63, May.
    4. Brophy Haney, A. & Jamasb, T. & Pollitt, M.G., 2009. "Smart Metering and Electricity Demand: Technology, Economics and International Experience," Cambridge Working Papers in Economics 0905, Faculty of Economics, University of Cambridge.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:10:p:6222-6231. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/enpol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.