IDEAS home Printed from https://ideas.repec.org/p/zbw/kitiip/14.html
   My bibliography  Save this paper

The impact of electricity tariffs on residential demand side flexibility

Author

Listed:
  • Hayn, Marian
  • Bertsch, Valentin
  • Zander, Anne
  • Nickel, Stefan
  • Fichtner, Wolf

Abstract

Energy systems based on renewable energy sources require increasing demand side flexibility. Also, changes in the underlying cost structure, i. e., decreasing variable costs and increasing infrastructure investments, and varying customer needs should be reflected in the setup of future markets, including retail markets and electricity providers’ tariffs. While various studies focus solely on tariffs with variable energy prices to leverage residential demand side flexibility, we incorporate tariffs with a variable capacity price component in our analysis. The latter enables electricity providers to offer more differentiated tariffs, considering individual customer needs and a balanced cost allocation. To compare the impact of different tariffs on residential demand side flexibility, we develop a bottom-up load model. This model not only simulates but also optimizes residential load profiles according to different tariffs. In order to account for behavioral aspects, the model is calibrated based on data from a large-scale field trial. Our results show that tariffs with variable energy prices induce larger demand side flexibility, but the impact of tariffs with variable capacity prices is more predictable and reliable from a supplier’s point of view. To enable sustainable business models, politics should change regulations rewarding demand side flexibility and facilitating the technical implementation.

Suggested Citation

  • Hayn, Marian & Bertsch, Valentin & Zander, Anne & Nickel, Stefan & Fichtner, Wolf, 2016. "The impact of electricity tariffs on residential demand side flexibility," Working Paper Series in Production and Energy 14, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    • Handle: RePEc:zbw:kitiip:14
    DOI: 10.5445/IR/1000054712
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/176740/1/kit-iip-wp-14.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.5445/IR/1000054712?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Henriot, Arthur, 2015. "Economic curtailment of intermittent renewable energy sources," Energy Economics, Elsevier, vol. 49(C), pages 370-379.
    2. Ambec, Stefan & Crampes, Claude, 2012. "Electricity provision with intermittent sources of energy," Resource and Energy Economics, Elsevier, vol. 34(3), pages 319-336.
    3. Bertsch, Joachim & Growitsch, Christian & Lorenczik, Stefan & Nagl, Stephan, 2016. "Flexibility in Europe's power sector — An additional requirement or an automatic complement?," Energy Economics, Elsevier, vol. 53(C), pages 118-131.
    4. Klinge Jacobsen, Henrik & Schröder, Sascha Thorsten, 2012. "Curtailment of renewable generation: Economic optimality and incentives," Energy Policy, Elsevier, vol. 49(C), pages 663-675.
    5. Valentin Bertsch & Hannes Schwarz & Wolf Fichtner, 2014. "Layout Optimisation of Decentralised Energy Systems Under Uncertainty," Operations Research Proceedings, in: Dennis Huisman & Ilse Louwerse & Albert P.M. Wagelmans (ed.), Operations Research Proceedings 2013, edition 127, pages 29-35, Springer.
    6. Broberg, Thomas & Persson, Lars, 2016. "Is our everyday comfort for sale? Preferences for demand management on the electricity market," Energy Economics, Elsevier, vol. 54(C), pages 24-32.
    7. Woo, Chi-Keung, 1990. "Efficient Electricity Pricing with Self-Rationing," Journal of Regulatory Economics, Springer, vol. 2(1), pages 69-81, March.
    8. Clastres, Cédric & Khalfallah, Haikel, 2015. "An analytical approach to activating demand elasticity with a demand response mechanism," Energy Economics, Elsevier, vol. 52(PA), pages 195-206.
    9. Simshauser, Paul, 2016. "Distribution network prices and solar PV: Resolving rate instability and wealth transfers through demand tariffs," Energy Economics, Elsevier, vol. 54(C), pages 108-122.
    10. Swan, Lukas G. & Ugursal, V. Ismet, 2009. "Modeling of end-use energy consumption in the residential sector: A review of modeling techniques," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 1819-1835, October.
    11. Cédric Clastres & Haikel Khalfallah, 2015. "An Analytical Approach to Activating Demand Elasticity with a Demand Response Mechanism," Post-Print hal-01222582, HAL.
    12. Grandjean, A. & Adnot, J. & Binet, G., 2012. "A review and an analysis of the residential electric load curve models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(9), pages 6539-6565.
    13. Gottwalt, Sebastian & Ketter, Wolfgang & Block, Carsten & Collins, John & Weinhardt, Christof, 2011. "Demand side management—A simulation of household behavior under variable prices," Energy Policy, Elsevier, vol. 39(12), pages 8163-8174.
    14. Huang, Shisheng & Hodge, Bri-Mathias S. & Taheripour, Farzad & Pekny, Joseph F. & Reklaitis, Gintaras V. & Tyner, Wallace E., 2011. "The effects of electricity pricing on PHEV competitiveness," Energy Policy, Elsevier, vol. 39(3), pages 1552-1561, March.
    15. Michalik, G. & Khan, M.E. & Bonwick, W.J. & Mielczarski, W., 1997. "Structural modelling of energy demand in the residential sector: 1. Development of structural models," Energy, Elsevier, vol. 22(10), pages 937-947.
    16. Ahmad Faruqui & Sanem Sergici, 2010. "Household response to dynamic pricing of electricity: a survey of 15 experiments," Journal of Regulatory Economics, Springer, vol. 38(2), pages 193-225, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Huang, Yunyou & Zhan, Jianfeng & Luo, Chunjie & Wang, Lei & Wang, Nana & Zheng, Daoyi & Fan, Fanda & Ren, Rui, 2019. "An electricity consumption model for synthesizing scalable electricity load curves," Energy, Elsevier, vol. 169(C), pages 674-683.
    2. Hannes Schwarz & Valentin Bertsch & Wolf Fichtner, 2018. "Two-stage stochastic, large-scale optimization of a decentralized energy system: a case study focusing on solar PV, heat pumps and storage in a residential quarter," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 40(1), pages 265-310, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lynch, Muireann & Devine, Mel T. & Bertsch, Valentin, 2019. "The role of power-to-gas in the future energy system: Market and portfolio effects," Energy, Elsevier, vol. 185(C), pages 1197-1209.
    2. Clastres, Cédric & Khalfallah, Haikel, 2021. "Dynamic pricing efficiency with strategic retailers and consumers: An analytical analysis of short-term market interactions," Energy Economics, Elsevier, vol. 98(C).
    3. Cédric Clastres & Haikel Khalfallah, 2020. "Retailers' strategies facing demand response and markets interactions," Working Papers hal-03167543, HAL.
    4. Lynch, Muireann Á & Devine, Mel & Bertsch, Valentin, 2018. "The role of power-to-gas in the future energy system: how much is needed and who wants to invest?," Papers WP590, Economic and Social Research Institute (ESRI).
    5. Y, Kiguchi & Y, Heo & M, Weeks & R, Choudhary, 2019. "Predicting intra-day load profiles under time-of-use tariffs using smart meter data," Energy, Elsevier, vol. 173(C), pages 959-970.
    6. Woo, C.K. & Sreedharan, P. & Hargreaves, J. & Kahrl, F. & Wang, J. & Horowitz, I., 2014. "A review of electricity product differentiation," Applied Energy, Elsevier, vol. 114(C), pages 262-272.
    7. Cédric Clastres & Haikel Khalfallah, 2021. "Dynamic pricing efficiency with strategic retailers and consumers: An analytical analysis of short-term market interactions," Post-Print hal-03193212, HAL.
    8. Katz, Jonas & Andersen, Frits Møller & Morthorst, Poul Erik, 2016. "Load-shift incentives for household demand response: Evaluation of hourly dynamic pricing and rebate schemes in a wind-based electricity system," Energy, Elsevier, vol. 115(P3), pages 1602-1616.
    9. Bertsch, Valentin & Harold, Jason & Fell, Harrison, 2019. "Consumer preferences for end-use specific curtailable electricity contracts on household appliances during peak load hours," Papers WP632, Economic and Social Research Institute (ESRI).
    10. Yilmaz, S. & Chambers, J. & Patel, M.K., 2019. "Comparison of clustering approaches for domestic electricity load profile characterisation - Implications for demand side management," Energy, Elsevier, vol. 180(C), pages 665-677.
    11. Harold, Jason & Bertsch, Valentin & Fell, Harrison, 2021. "Preferences for curtailable electricity contracts: Can curtailment benefit consumers and the electricity system?," Energy Economics, Elsevier, vol. 102(C).
    12. Durmaz, Tunç, 2016. "Precautionary Storage in Electricity Markets," Discussion Papers 2016/5, Norwegian School of Economics, Department of Business and Management Science.
    13. Carsten Helm & Mathias Mier, 2020. "Steering the Energy Transition in a World of Intermittent Electricity Supply: Optimal Subsidies and Taxes for Renewables Storage," ifo Working Paper Series 330, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    14. Feuerriegel, Stefan & Neumann, Dirk, 2014. "Measuring the financial impact of demand response for electricity retailers," Energy Policy, Elsevier, vol. 65(C), pages 359-368.
    15. Bernadeta Gołębiowska & Anna Bartczak & Mikołaj Czajkowski, 2020. "Energy Demand Management and Social Norms," Energies, MDPI, vol. 13(15), pages 1-20, July.
    16. Helm, Carsten & Mier, Mathias, 2021. "Steering the energy transition in a world of intermittent electricity supply: Optimal subsidies and taxes for renewables and storage," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    17. Gambardella, Christian & Pahle, Michael, 2018. "Time-varying electricity pricing and consumer heterogeneity: Welfare and distributional effects with variable renewable supply," Energy Economics, Elsevier, vol. 76(C), pages 257-273.
    18. Zúñiga, K.V. & Castilla, I. & Aguilar, R.M., 2014. "Using fuzzy logic to model the behavior of residential electrical utility customers," Applied Energy, Elsevier, vol. 115(C), pages 384-393.
    19. Vesterberg, Mattias, 2017. "Power to the people: Electricity demand and household behavior," Umeå Economic Studies 942, Umeå University, Department of Economics.
    20. Fridgen, Gilbert & Kahlen, Micha & Ketter, Wolfgang & Rieger, Alexander & Thimmel, Markus, 2018. "One rate does not fit all: An empirical analysis of electricity tariffs for residential microgrids," Applied Energy, Elsevier, vol. 210(C), pages 800-814.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:kitiip:14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://www.iip.kit.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.