Real-time electricity pricing to balance green energy intermittency

Stefan Ambec and Claude Crampes

Energy Economics, 2021, vol. 94, issue C

Abstract: The presence of consumers able to respond to changes in wholesale electricity prices facilitates the penetration of renewable intermittent sources of energy such as wind or sun power. We investigate how adapting demand to intermittent electricity supply by making consumers price-responsive - thanks to smart meters and home automation appliances - impacts the energy mix. We show that it almost always reduces carbon emissions. Furthermore, when consumers are not too risk-averse, demand response is socially beneficial because the loss from exposing consumers to volatile prices is more than offset by lower production and environmental costs. However, the gain is decreasing when the proportion of reactive consumers increases. Therefore, depending on the costs of the necessary smart hardware, it may be non-optimal to equip the whole population.

Keywords: Electricity; Intermittency; Renewables; Dynamic pricing; Demand response; Smart meters (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Working Paper: Real-time electricity pricing to balance green energy intermittency (2021)
Working Paper: Real-time electricity pricing to balance green energy intermittency (2021)
Working Paper: Real-time electricity pricing to balance green energy intermittency (2020)
Working Paper: Real-time electricity pricing to balance green energy intermittency (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:94:y:2021:i:c:s014098832030414x

DOI: 10.1016/j.eneco.2020.105074

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