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

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  • 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)

Abstract

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.

Suggested Citation

  • Will Gans & Anna Alberini & Alberto Longo, 2011. "Smart Meter Devices and The Effect of Feedback on Residential Electricity Consumption: Evidence from a Natural Experiment in Northern Ireland," CEPE Working paper series 11-78, CEPE Center for Energy Policy and Economics, ETH Zurich.
    • Handle: RePEc:cee:wpcepe:11-78
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    More about this item

    Keywords

    Residential Energy; Electricity Demand; Feedback; Smart Meter; Information;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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