The role of knowledge about user behaviour in demand response management of domestic hot water usage

Load balancing is an important topic in smart grid systems. Dynamic pricing is a common approach to achieve a better balance between renewable energy production and energy usage. This assumes that individual households adapt their energy usage patterns based on energy prices. However, the actual behaviour of consumers in a household is an uncertain factor that might influence the effectiveness of pricing strategies. In this paper, we investigate to what extent knowledge about actual user behaviour can contribute to local optimization of energy usage. We use simulations to study whether a smart heating system that applies a pre-heating strategy for domestic water during periods of low prices can benefit from good predictions of the user behaviour, in financial terms or in terms of energy saving. Also, we use the simulations to investigate the effect of different goal temperatures for the pre-heating strategy. The results show that pre-heating does not make a difference with respect to the energy efficiency, but that during cold months, pre-heating can result in a financial benefit. In addition, we calculate what certainty about the user behaviour is needed to be able to effectively use pre-heating during the warmer summer month. These results can help to design residential energy optimization systems.     

Power to change: Analysis of household participation in a renewable energy and energy efficiency programme in Central Australia

The Australian government funded a national Solar City program (2008–2013) to support communities to increase adoption of energy efficiency measures and renewable energy technology. One community was Alice Springs, a town with about 9000 households in the geographic centre of Australia. The programme offered a package of support: free energy audits, discounts for the purchase of renewable energy technology and energy efficiency measures, and ongoing information. Households that adopted solar hot water and photovoltaic systems reduced their electricity usage immediately after adoption by 10% and 34% respectively, and this was maintained in the long term. A small rebound effect of 15% was observed in the photovoltaic adopters. It was observed that, on average, households that adopted only energy efficiency measures did not have a significant reduction in their electricity usage over the long term. However, consistent with expectations, this study did show that there was a significant correlation between the number of energy efficiency measures adopted and the greatest household reduction in electricity usage. These contrary results indicate that there are additional factors involved. The connection between the effective use of measures, coincident behavioural change or increased energy awareness and greater energy reduction is discussed.     

A real options evaluation model for the diffusion prospects of new renewable power generation technologies

This study presents a policy planning model that integrates learning curve information on renewable power generation technologies into a dynamic programming formulation featuring real options analysis. The model recursively evaluates a set of investment alternatives on a year-by-year basis, thereby taking into account that the flexibility to delay an irreversible investment expenditure can profoundly affect the diffusion prospects of renewable power generation technologies. Price uncertainty is introduced through stochastic processes for the average wholesale price of electricity and for input fuel prices. Demand for electricity is assumed to be increasingly price-sensitive, as the electricity market deregulation proceeds, reflecting new options of consumers to react to electricity price changes (such as time-of-use pricing, unbundled electricity services, and choice of supplier). The empirical analysis is based on data for the Turkish electricity supply industry. Apart from general implications for policy-making, it provides some interesting insights about the impact of uncertainty and technical change on the diffusion of various emerging renewable energy technologies.     

A bilevel model for electricity retailers' participation in a demand response market environment

Demand response programmes are seen as one of the contributing solutions to the challenges posed to power systems by the large-scale integration of renewable power sources, mostly due to their intermittent and stochastic nature. Among demand response programmes, real-time pricing schemes for small consumers are believed to have significant potential for peak-shaving and load-shifting, thus relieving the power system while reducing costs and risk for energy retailers. This paper proposes a game theoretical model accounting for the Stackelberg relationship between retailers (leaders) and consumers (followers) in a dynamic price environment. Both players in the game solve an economic optimisation problem subject to stochasticity in prices, weather-related variables and must-serve load. The model allows the determination of the dynamic price-signal delivering maximum retailer profit, and the optimal load pattern for consumers under this pricing. The bilevel programme is reformulated as a single-level MILP, which can be solved using commercial off-the-shelf optimisation software. In an illustrative example, we simulate and compare the dynamic pricing scheme with fixed and time-of-use pricing. We find that the dynamic pricing scheme is the most effective in achieving load-shifting, thus reducing retailer costs for energy procurement and regulation in the wholesale market. Additionally, the redistribution of the saved costs between retailers and consumers is investigated, showing that real-time pricing is less convenient than fixed and time-of-use price for consumers. This implies that careful design of the retail market is needed. Finally, we carry out a sensitivity analysis to analyse the effect of different levels of consumer flexibility.     

A new approach to congestion pricing in electricity markets: Improving user pays pricing incentives

Electricity pricing has traditionally been based on average cost pricing where consumers pay a ‘flat’ tariff based upon the average cost of production and transportation of electricity. The introduction of new ‘smart’ meters allows electricity providers to differentiate tariffs on the basis of time. Utilising congestion pricing theory, the energy industry has embraced ‘time-of-use’ (ToU) tariffs with a view to more efficiently pricing electricity. This paper demonstrates that pricing as a function of demand variability (reflecting capacity utilisation) is a more appropriate alternative to existing ToU tariffs for more efficiently allocating costs to end users. We call this new alternative pricing model ‘first derivative ratio’ FDR pricing. This new approach to congestion pricing could be applied to markets other than electricity, such as road transportation.     

Cost-reflective electricity pricing: Consumer preferences and perceptions

In Australia, residential electricity peak demand has risen steeply in recent decades, leading to higher prices as new infrastructure was needed to satisfy demand. One way of limiting further infrastructure-induced retail price rises is via ‘cost-reflective’ electricity network pricing that incentivises users to shift their demand to non-peak periods. Empowering consumers with knowledge of their energy usage is critical to maximise the potential benefits of cost-reflective pricing. This research consulted residential electricity consumers in three Australian states on their perceptions and acceptance of two cost-reflective pricing scenarios (Time-of-Use and Peak Capacity pricing) and associated technologies to support such pricing (smart meters, in-home displays and direct load control devices). An energy economist presented information to focus groups on the merits and limitations of each scenario, and participants’ views were captured. Almost half of the 53 participants were agreeable to Time-of-Use pricing, but did not have a clear preference for Peak Capacity pricing, where the price was based on the daily maximum demand. Participants recommended further information to both understand and justify the potential benefits, and for technologies to be introduced to enhance the pricing options. The results have implications for utilities and providers who seek to reduce peak demand.     

The importance of marginal cost electricity pricing to the success of greenhouse gas reduction programs

The efficient reduction of GHG emissions requires appropriate retail pricing of off-peak electricity. However, off-peak electricity for residential consumers is priced at 331% above its marginal cost in the United States as a whole (June 2009). Even for the 1% of residences that are on some form of time-of-use (TOU) rate schedule, the off-peak rate is almost three times higher than the marginal cost. A barrier to marginal-cost based TOU rates is that less than 9% of U.S. households have the “smart” meters in place that can measure and record the time of consumption. Policies should be put in place to achieve full deployment. Another important barrier is consumer concern about TOU rate design. Two TOU rate designs (baseline and two-part tariff) are described that utilize marginal-cost based rates, ensure appropriate cost recovery, and minimize bill changes from current rate structures. A final barrier is to get residences on to these rates. Should a marginal-cost based TOU rate design remain an alternative for which residences could “opt-in,” or become the default choice, or become mandatory? Time-invariant rates are a historical anachronism that subsidize very costly peak-period consumption and penalize off-peak usage to our environmental detriment. They should be phased out.     

Effects of demand side management on Chinese household electricity consumption: Empirical findings from Chinese household survey

China’s residential electricity demand has grown rapidly over the last three decades and given the expected continued growth, demand side management (DSM) can play an important role in reducing electricity demand. By using micro-level data collected from 1450 households in 27 provinces in the first-ever China Residential Energy Consumption Survey in 2012, this study estimates the effects of three DSM measures empirically: tiered household electricity pricing, China Energy Label program, and information feedback mechanisms. We find these measures have contributed to moderating residential electricity demand growth but additional policy reform and tools are needed to increase their effectiveness and impact. Residential electricity demand is found to be price- and income- inelastic and tiered pricing alone may not be as effective in electricity conservation. The statistically significant relationship between China Energy Label efficient refrigerators - but not televisions - and lowered residential electricity consumption reflect mixed program effectiveness. Lastly, of the information feedback currently available through electricity bills, payment frequency and meters, only meter reader is estimated to be statistically significant. Important policy implications and recommendations for improving each of these three DSM measures to expand their impact on reducing residential electricity consumption are identified.     

A comparative analysis of time-of-use electricity rate effects: The Arizona experiment

To date, analyses of the data from the Arizona time-of-use (TOU) electricity pricing experiment have failed to find a significant relationship between electricity usage and electricity price. Results indicated that if the TOU rates had an effect on usage, the effect was virtually identical for each TOU rate. In this study, usage in 1976 under the TOU rates is compared to usage in 1975 under the existing (declining block) rate to determine whether or not there was an effect.It is found that peak period usage was reduced under TOU rates by 7–16% after adjusting for differences in weather between the two years. To a lesser extent, customers reduced their usage during the intermediate period and shifted some consumption to the base period. Total consumption appears to have decreased slightly. It is emphasized that these effects of the TOU rates cannot be discovered in demand analyses that do not utilize the baseline year data.     

The influences of financial and non-financial factors on energy-saving behaviour: A field experiment in Japan

This study examines the influences of financial and non-financial factors on electricity-conservation behaviour. A random sample of 236 Japanese households participated in the field experiment and the participants were offered two interventions, such as monetary rewards, depending on their reduction in electricity consumption and comparative feedback. The average saving rates of the (i) reward-intervention group (5.9%) and the (ii) reward with comparative feedback group (8.2%) are statistically larger than those of the (iii) control group (1.7%). Our study demonstrates the following. First, our econometric analysis confirmed a significant response by households to financial incentives but a more inconclusive response to the treatment that provided non-financial, additional information. Second, we found a positive influence of treatment externalities across time and households on energy saving. Third, there is a heterogeneous treatment effect in the reward-intervention group, with the households having a high New Ecological Paradigm (NEP) score being more likely to respond to the reward programme and save electricity than those that do not. Finally, and most interestingly, differences in responses to the questionnaire before and after the experiment suggest that the participants had underestimated the marginal costs of saving electricity before they actually started to do so.     

Regionally-varying and regionally-uniform electricity pricing policies compared across four usage categories

The objective of our research is to predict how electricity demand varies spatially between status quo regionally-uniform electricity pricing and hypothetical regionally-varying electricity pricing across usage categories. We summarize the empirical results of a case study of electricity demand in South Korea with three key findings and their related implications. First, the price elasticities of electricity demand differ across usage categories. Specifically, electricity demands for manufacturing and retail uses are price inelastic and close to unit elastic, respectively, while those for agricultural and residential uses are not statistically significant. This information is important in designing energy policy, because higher electricity prices could reduce electricity demands for manufacturing and retail uses, resulting in slower growth in those sectors. Second, spatial spillovers in electricity demand vary across uses. Understanding the spatial structure of electricity demand provides useful information to energy policy makers for anticipating changes in demand across regions via regionally-varying electricity pricing for different uses. Third, simulation results suggest that spatial variations among electricity demands by usage category under a regionally-varying electricity-pricing policy differ from those under a regionally-uniform electricity-pricing policy. Differences in spatial changes between the policies provide information for developing a realistic regionally-varying electricity-pricing policy according to usage category.     

Information strategies for energy conservation: A field experiment in India

Little is known about the effectiveness of information strategies on energy conservation in developing countries. In this study, we conduct a field experiment in an apartment complex in India to test how information about electricity usage impacts the electricity consumption of urban middle class households. Our results, based on fifteen-minute electricity readings over an academic year, show that non-monetary messages that framed electricity consumption in terms of environmental and health impacts were more effective than messages emphasizing the monetary savings of reducing electricity consumption. Households in the environmental/health group accessed the online energy-monitoring dashboard more frequently and reduced their electricity usage by 18.4% relative to the control group. Households in the monetary group did not significantly alter their usage. These results about revealed preferences are contrasted with stated preferences disclosed in a survey of urban Indians who describe money, not health, as the main motivation for energy conservation. Our findings have important implications for the development non-monetary strategies for energy conservation in developing countries.     

The cost impacts of a mandatory move to time-of-use pricing on residential customers: an Ontario (Canada) case-study

Using 2008 hourly electricity data from 1,020 households in Milton, Ontario (Canada), this article asks and answers two questions: ‘How do residential customers’ total costs change as the result of a mandatory move from a traditional, flat-rate pricing structure, to a time-of-use one?’; and ‘Are particular “kinds” of customers either “winners” or “losers” as a result of this move?’ In response to the first question, 45% of customers have lower bills under a time-of-use regime (as compared with what they would have paid, had the previous two-tier regime continued, with their ‘new’ consumption patterns), while 55% of customers have higher bills. For 98.2% of customers, the difference in total cost is less than 5% (either way), and the average relative change is a 0.233% increase. In response to the second question, customers that have a relatively high level of consumption in either peak periods or wintertime are, in the absence of other differences, more likely to have higher bills under a time-of-use regime. Those households that consume higher quantities of electricity are more likely to have lower bills under a time-of-use regime, as compared with the two-tier regime. The article concludes by highlighting the equity implications of this finding and by identifying areas for future research.     

Towards flexible energy demand – Preferences for dynamic contracts,services and emissions reductions

Households’ preferences for attributes of flexible energy demand are not well understood. This paper evaluates Finnish households’ acceptance of hypothetical contracts and services aimed at increasing demand side flexibility. We conduct a Choice Experiment to analyze households’ willingness to offer flexibility through timing their electricity usage and heating; their interest in dynamic pricing contracts such as real-time pricing, two-rate tariffs, or power-based tariffs; and how emissions reductions affect their choices. The results indicate that households’ sensitivity to restrictions in electricity usage is much stronger than their sensitivity to restrictions in heating. Households also require considerable compensation to choose real-time pricing over fixed fees. Furthermore, other value-creating elements besides monetary compensation could incentivize households to offer demand side flexibility because they value reductions in CO₂ emissions at the power system level.     

Assessment of public acceptance and willingness to pay for renewable energy sources in Crete

The aim of this study is to analyse and to evaluate the citizens’ public acceptance and willingness to pay (WTP), for Renewable Energy Sources (RES) in Crete. For this purpose a contingent valuation study was conducted, using a double bound dichotomous choice format to elicit people's WTP and factors affecting it. Residents of 1440 households all over Crete were interviewed face-to-face. Major conclusions can be used as a basis for sustainable energy planning, for policies and the formulation of awareness campaigns and for RES investment programs and projects in order to prepare implementation conditions and enhance public acceptance of renewable energy investments and programmes. Mean WTP per household was found to be 16.33€ to be paid quarterly as an additional charge on the electricity bill. Larger willingness to pay was reported by those with high family income and residence size, those having a higher level of energy information and awareness concerning climatic change, those who have invested in some energy saving measures, and those who suffer from more electricity shortages than others.     

Electricity saving in households—A social cognitive approach

We propose a conceptual framework for understanding the (lack of) energy saving efforts of private households based on Bandura’s (1986) social cognitive theory. Results from applying this framework on a sample of Danish private electricity consumers are presented and it is concluded (a) that households' electricity consumption depends on both structural and motivational factors, (b) that their electricity saving effort depends on the strength of their internalized norms or self-expectations and on self-efficacy related factors, and (c) that there are predictable patterns of interaction among household members that influence their electricity consumption. The results suggest two approaches to promote electricity saving in households: (1) to change the socio-structural environment to be more facilitating for energy saving and empower householders to be more effective in their striving towards this goal through improved feedback about their household's electricity consumption and (2) social norms marketing, communicating social expectations and others' successful electricity saving achievements.     

结合能效水平对标开展工业固定资产投资项目节能评估的实践

能效水平对标和固定资产投资项目节能评估都是国家鼓励的、经过实践验证的、效果显著的节能管理措施,两者有机地结合起来,可以放大节能效果,提高节能经济性。云南省节能技术服务中心在2007年成功开展年综合能耗为5000t标煤及以上的重点用能企业能效水平对标活动的基础上,结合能效水平对标在云南省率先开展了工业固定资产投资项目的节能评估工作,完成了70多个项目的节能评估。具体做法为：在项目前期可行性研究环节,督促可研报告编制单位根据项目所在行业的特点设计完整的能效指标体系、能源计量体系、能源管理体系,并开展能效水平对标,做到从项目源头抓节能,提高项目节能经济效益。能效水平对标的原则为：对于国家规定的22项高耗能产品的工业固定资产投资项目,进行强制性能效水平对标;对于新建、改建和扩建项目,主要产品的单位产品能耗达必须达到能耗限额准入值;在技术、投资许可的情况下,单位产品能耗水平应尽量达到产品能耗限额目标值的规定。     

基于分时电价的水库调度图优化研究

以芹山水库为例,结合分时电价原理与水库优化调度理论,划分了分时电价的时段,建立了考虑电价的以水电站水库发电效益最大为目标、兼顾保证出力要求的优化调度模型,应用改进的遗传算法优化水库常规调度图.结果表明,考虑分时电价影响后平均出力变小,能多发峰电,增加发电效益.     

Power-use profile analysis of non-domestic consumers for electricity tariff switching

For both domestic and non-domestic consumers, dynamic electricity tariffs have been proposed as a way to reduce their energy costs and to facilitate demand-side response. It is difficult for businesses which are tenants to adopt energy efficiency measures; thus, tariff switching is the easier option. Therefore, understanding the limits of the cost saving offered by tariff switching is an important step. This raises two questions: by how much could bills be reduced, and would all consumers benefit equally? Using a dataset of half-hourly electricity readings from more than 7500 British businesses, we performed an empirical analysis to discover which types of businesses might have lower or higher costs when changing between static and real-time tariffs. We identified differences in demand profiles that demonstrate that the decision whether to switch tariff types is a subtle one which may have a significant cost impact. The dataset was aggregated into five categories: Entertainment, Industry, Retail, Social, and Other. Our analytical methods can be used to distinguish the differences between typical electricity demand profiles for small- to medium-sized businesses and sectors in different market options. Our analyses of switching to a real-time tariff suggest that most of those small- to medium-sized businesses that would reduce their annual electricity bill would gain by no more than 10 %. Most of these businesses would gain by less than 5 %. This, we suggest, sets a realistic upper limit of the likely cash savings before energy efficiency, or other measures must be taken to further reduce bills.     

Smart metering for residential energy efficiency: The use of community based social marketing for behavioural change and smart grid introduction

Community-based social marketing (CBSM) has shown to be very effective at inducing behavioural change due to its pragmatic approach. It has been found that nonintegrated intensive approaches towards changing individual's behaviour, such as education and economic self-interest are not successful.This paper will explain how a large urban electricity meter replacement program can achieve a reduction in peak demand and overall energy consumption through the use of advanced metering infrastructure (AMI or ‘smart meters’) coupled with CBSM, which in turn enables the progression towards a ‘smart grid’. In order to measure success the following targets were set:

• •Peak demand reduction (peak lopping) of 20% from the households participating in the Behaviour Change Programs (BCPs).
• •Peak demand shifting (load shifting) to reduce energy consumption during ‘super peak’ by 10% in BCP participating households.
• •Average total energy use reduction of 10% in BCP participating households.

The energy efficiency actions discussed with householders during eco-coaching, and other feedback communications, are identified by utilising the information regarding barriers and benefits generated from the research phase prior to coaching. These actions can include referral to other initiatives such as the provision of reduced cost solar PV power systems, direct load control devices for domestic air-conditioners, the time-of-use pricing product, the provision of in-home-displays (IHD) and other devices necessary for development of a ‘smart grid’.