IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v41y2020i4p129-152.html

Utility Customer Supply of Demand Response Capacity

Author

Listed:
  • James I. Stewart

Abstract

This research investigates utility customer supply of demand response capacity to electric utilities. Using panel data on annual utility demand response capacity and capacity payments between 2010 and 2016, I estimate the long-run price elasticity of supply of demand response capacity from residential, commercial, and industrial customers. The supply of demand response capacity was price-inelastic, with elasticities of 0.5 for residential customers, 0.6 for commercial customers, and 0.4 for industrial customers. These estimates are long-run supply elasticities because utility customers could enter or exit demand response markets. Also, residential customer supply of demand response capacity was heterogeneous, affected by characteristics such as customer education, urban residency, and home space heating fuel. These findings will be of interest to regulators, utility resource planners, and program administrators who want to increase demand response capacity.

Suggested Citation

  • James I. Stewart, 2020. "Utility Customer Supply of Demand Response Capacity," The Energy Journal, , vol. 41(4), pages 129-152, July.
    • Handle: RePEc:sae:enejou:v:41:y:2020:i:4:p:129-152
    DOI: 10.5547/01956574.41.4.jste
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/01956574.41.4.jste
    Download Restriction: no
    File URL: https://libkey.io/10.5547/01956574.41.4.jste?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Smith, Alexander M. & Brown, Marilyn A., 2015. "Demand response: A carbon-neutral resource?," Energy, Elsevier, vol. 85(C), pages 10-22.
    2. Frank A. Wolak, 2011. "Do Residential Customers Respond to Hourly Prices? Evidence from a Dynamic Pricing Experiment," American Economic Review, American Economic Association, vol. 101(3), pages 83-87, May.
    3. repec:aen:journl:ej38-1-eryilmaz is not listed on IDEAS
    4. repec:aen:journl:ej40-3-dahlke is not listed on IDEAS
    5. repec:aen:journl:ej39-2-burke is not listed on IDEAS
    6. Koichiro Ito & Takanori Ida & Makoto Tanaka, 2018. "Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 240-267, February.
    7. Ahmad Faruqui & Sanem Sergici, 2010. "Household response to dynamic pricing of electricity: a survey of 15 experiments," Journal of Regulatory Economics, Springer, vol. 38(2), pages 193-225, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xie, Li & Huang, Zhisheng, 2025. "Electricity price cross-subsidies and enterprises’ green total factor productivity: Empirical evidence from Chinese industrial listed enterprises," Journal of Asian Economics, Elsevier, vol. 96(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guojun He & Takanao Tanaka, 2019. "Energy Saving Can Kill: Evidence from the Fukushima Nuclear Accident," HKUST IEMS Working Paper Series 2019-67, HKUST Institute for Emerging Market Studies, revised Sep 2019.
    2. Kayo Murakami & Hideki Shimada & Yoshiaki Ushifusa & Takanori Ida, 2022. "Heterogeneous Treatment Effects Of Nudge And Rebate: Causal Machine Learning In A Field Experiment On Electricity Conservation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1779-1803, November.
    3. Ioana Bejan & Carsten Lynge Jensen & Laura M. Andersen & Lars Gårn Hansen, 2019. "The hidden cost of real time electricity pricing," IFRO Working Paper 2019/03, University of Copenhagen, Department of Food and Resource Economics.
    4. Ida, Takanori & Motegi, Naoya & Ushifusa, Yoshiaki, 2019. "Behavioral study of personalized automated demand response in the workplace," Energy Policy, Elsevier, vol. 132(C), pages 1009-1016.
    5. Llerena, D. & Roussillon, B. & Teyssier, S. & Buckley, P. & Delinchant, B. & Ferrari, J. & Laranjeira, T. & Wurtz, F., 2021. "Demand response in the workplace: A field experiment," Working Papers 2021-01, Grenoble Applied Economics Laboratory (GAEL).
    6. Julien Ancel, 2025. "Tariffs time-dynamics in competitive electricity retail markets with differentiated consumer reactions," Post-Print hal-05100663, HAL.
    7. repec:aen:eeepjl:eeep5-1-ida is not listed on IDEAS
    8. Guo, Bowei, 2023. "The spillover effect of peak pricing," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    9. repec:aen:journl:ej37-si3-pahle is not listed on IDEAS
    10. Ren'e Aid & Dylan Possamai & Nizar Touzi, 2018. "Optimal electricity demand response contracting with responsiveness incentives," Papers 1810.09063, arXiv.org, revised May 2019.
    11. Adélaïde Fadhuile & Daniel Llerena & Béatrice Roussillon, 2023. "Intrinsic Motivation to Promote the Development of Renewable Energy : A Field Experiment from Household Demand," Working Papers hal-03977597, HAL.
    12. Daniel Adelman & Canan Uçkun, 2019. "Dynamic Electricity Pricing to Smart Homes," Operations Research, INFORMS, vol. 67(6), pages 1520-1542, November.
    13. Freier, Julia & von Loessl, Victor, 2022. "Dynamic electricity tariffs: Designing reasonable pricing schemes for private households," Energy Economics, Elsevier, vol. 112(C).
    14. repec:aen:journl:ej36-4-bollino is not listed on IDEAS
    15. Meeks, Robyn C. & Omuraliev, Arstan & Isaev, Ruslan & Wang, Zhenxuan, 2023. "Impacts of electricity quality improvements: Experimental evidence on infrastructure investments," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).
    16. Azarova, Valeriya & Cohen, Jed J. & Kollmann, Andrea & Reichl, Johannes, 2020. "Reducing household electricity consumption during evening peak demand times: Evidence from a field experiment," Energy Policy, Elsevier, vol. 144(C).
    17. List, John A. & Metcalfe, Robert D. & Price, Michael K. & Rundhammer, Florian, "undated". "Harnessing Policy Complementarities to Conserve Energy: Evidence from a Natural Field Experiment," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258139, Agricultural and Applied Economics Association.
    18. Ioana Bejan & Carsten Lynge Jensen & Laura M. Andersen & Lars Gårn Hansen, 2018. "The Economic Value of Habits in Household Production – A Field Experiment," IFRO Working Paper 2018/01, University of Copenhagen, Department of Food and Resource Economics.
    19. Capitán, Tabaré & Alpízar, Francisco & Madrigal-Ballestero, Róger & Pattanayak, Subhrendu K., 2021. "Time-varying pricing may increase total electricity consumption: Evidence from Costa Rica," Resource and Energy Economics, Elsevier, vol. 66(C).
    20. Ayu Washizu & Satoshi Nakano & Hideo Ishii & Yasuhiro Hayashi, 2019. "Willingness to Pay for Home Energy Management Systems: A Survey in New York and Tokyo," Sustainability, MDPI, vol. 11(17), pages 1-20, September.
    21. repec:osf:thesis:7zprk_v1 is not listed on IDEAS
    22. Jesse Burkhardt & Kenneth Gillingham & Praveen K. Kopalle, 2019. "Experimental Evidence on the Effect of Information and Pricing on Residential Electricity Consumption," NBER Working Papers 25576, National Bureau of Economic Research, Inc.
    23. Lin, Boqiang & Zhu, Penghu, 2021. "Has increasing block pricing policy been perceived in China? Evidence from residential electricity use," Energy Economics, Elsevier, vol. 94(C).
    24. Qiu, Yueming & Colson, Gregory & Wetzstein, Michael E., 2017. "Risk preference and adverse selection for participation in time-of-use electricity pricing programs," Resource and Energy Economics, Elsevier, vol. 47(C), pages 126-142.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:sae:enejou:v:41:y:2020:i:4:p:129-152. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.