An Analysis of a Demand Charge Electricity Grid Tariff in the Residential Sector
This paper analyses the demand response from residential electricity consumers to a demand charge grid tariff. The tariff charges the maximum hourly peak consumption in each of the winter months January, February and December, thus giving incentives to reduce peak consumption. We use hourly electricity consumption data from 443 households, as well as data on their network and power prices, the local temperature, wind speed and hours of daylight. The panel data set is analysed with a fixed effects regression model. The estimates indicate a demand reduction between 0.07 and 0.27 kWh/h in response to the tariff. This is on average a 5 percent reduction, with a maximum reduction of 9 percent in hour 8. The consumers did not receive any information on their continuous consumption or any reminders when the tariff was in effect. It is likely that the consumption reductions would have been even higher with more information to the consumers.
|Date of creation:||Jan 2009|
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References listed on IDEAS
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- Torgeir Ericson, 2006. "Time-differentiated pricing and direct load control of residential electricity consumption," Discussion Papers 461, Statistics Norway, Research Department.
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"Residential response to voluntary time-of-use electricity rates,"
Resource and Energy Economics,
Elsevier, vol. 20(3), pages 225-244, September.
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- Granger, Clive W. J. & Engle, Robert & Ramanathan, Ramu & Andersen, Allan, 1979. "Residential load curves and time-of-day pricing : An econometric analysis," Journal of Econometrics, Elsevier, vol. 9(1-2), pages 13-32, January.
- Herter, Karen, 2007. "Residential implementation of critical-peak pricing of electricity," Energy Policy, Elsevier, vol. 35(4), pages 2121-2130, April. Full references (including those not matched with items on IDEAS)
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