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The perverse impact of calling for energy conservation

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  • Holladay, J. Scott
  • Price, Michael K.
  • Wanamaker, Marianne

Abstract

In periods of high energy demand, utilities frequently issue “emergency” appeals for conservation over peak hours to reduce brownout risk. We estimate the impact of such appeals using high-frequency data on actual and forecasted electricity generation, pollutant emission measures, and real-time prices. Our results suggest a perverse impact; while there is no significant reduction in grid stress over superpeak hours, such calls lead to increased off-peak generation, CO2 emissions, and price volatility. We postulate that consumer attempts at load shifting lead to this result.

Suggested Citation

  • Holladay, J. Scott & Price, Michael K. & Wanamaker, Marianne, 2015. "The perverse impact of calling for energy conservation," Journal of Economic Behavior & Organization, Elsevier, vol. 110(C), pages 1-18.
    • Handle: RePEc:eee:jeborg:v:110:y:2015:i:c:p:1-18
    DOI: 10.1016/j.jebo.2014.11.008
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    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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