On the Effectiveness of Demand Side Management Information Programs on Household Electricity Demand

We empirically study the effectiveness of a Demand Side Management (DSM) program for households based on customer information. The literature points out that suppliers as well as consumers behave strategically such that DSM cannot work. Obviously, the supplier has no incentive to reduce the demand of his own product, and the consumer counteracts the supplier's measures by reducing his/her own effort. Within the case of the Irish Electricity Supply Board (ESB) these effects are ruled out. On the one side, due to the country's specific geographical location and much higher increases than expected in electricity demand the ESB had to use all means to reduce electricity demand. And, on the other side, the instrument of customer information as a DSM device rules out strategic behavior of customers. We find that customer information reduced overall electricity demand by roughly 7%. It was also effective as a load management device as demand fluctuations over the year were reduced. Finally, the short-run dynamic effect of DSM seems to be insignificant, this implies that DSM does not change demand behavior but reduces demand through consumers switching to more efficient electric appliances.