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The Effect of Demand Response on Electricity Consumption in Japan

Author

Listed:
  • Fumitoshi Mizutani

    (Graduate School of Business Administration, Kobe University)

  • Takuro Tanaka

    (Graduate School of Economics, Kobe University)

  • Eri Nakamura

    (Graduate School of Business Administration, Kobe University)

Abstract

The main purpose of this study is to investigate, by using regressions analysis, the DR effect on households' electricity consumption. We employ three kinds of estimation models: a pooled OLS model, a random effect model, and a fixed effect model. Major results are as follows. First, the DR scheme clearly reduces electricity consumption. As the peak-time price of electricity increases by 20 yen/kWh in the form of TOU and CPP, electricity consumption decreases by about 8.1% at sample mean. However, consumption after DR tends to increase, most likely due to the rebound effect. Second, the reduction effects of the DR scheme can be strengthened as households' income becomes higher. In contrast, as more people stay at home during the daytime and the temperature rises, the reduction effects of the DR scheme may become weaker. Third, electricity price, household characteristics, and external conditions are significant factors affecting electricity consumption. Fourth, the effects of some DR schemes such as requests to save electricity, TOU, and CPP, can differ largely according to household characteristics and external conditions.

Suggested Citation

  • Fumitoshi Mizutani & Takuro Tanaka & Eri Nakamura, 2015. "The Effect of Demand Response on Electricity Consumption in Japan," Discussion Papers 2015-02, Kobe University, Graduate School of Business Administration.
    • Handle: RePEc:kbb:dpaper:2015-02
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Demand Response; Electricity Consumption; Time of Use; Critical Peak Pricing;
    All these keywords.

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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