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

  • Will Gans


    (AREC, University of Maryland, College Park)

  • Anna Alberini


    (Department of Agricultural Economics, university of Maryland, US and Centre for Energy Policy and Economics (CEPE), ETH Zurich, Switzerland)

  • Alberto Longo


    (Gibson Institute for Land Food and Environment, UKCRC Centre of Excellence for Public Health (NI), School of Biological Sciences, Queen‘s University, Belfast)

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 percent. We find that the reduction is robust to different specifications, selection-bias correction methods and subsamples of the original data. At GBP 15-17 per tonne of CO2e (2009), the smart meter program delivers cost-effective reductions in carbon dioxide emissions.

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Paper provided by CEPE Center for Energy Policy and Economics, ETH Zurich in its series CEPE Working paper series with number 11-78.

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Length: 47 pages
Date of creation: Apr 2011
Date of revision:
Handle: RePEc:cee:wpcepe:11-78
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