Household heterogeneity in valuing electricity demand flexibility services

Aemiro Melkamu Daniel Melkamu Daniel ()
Additional contact information
Aemiro Melkamu Daniel Melkamu Daniel: CERE - the Center for Environmental and Resource Economics

No 2020:2, CERE Working Papers from CERE - the Center for Environmental and Resource Economics

Abstract: In this paper, we seek to investigate heterogeneity in households’ valuation of electricity contract attributes that reflect demand-side flexibility in the Swedish residential sector. Using stated preference data generated from a choice experiment, we estimate a mixed logit model in willingness-to-pay space and derive individual-specific conditional mean valuations for contract attributes which include various load controls and distribution of electricity consumption information. We perform a posterior analysis and identify different segments based on the monetary values households attach to the contract attributes. We find that a large proportion of households asks for substantial compensation to accept various load controls and to share their electricity consumption information. However, some households are willing to share their electricity consumption information and ask for relatively lower compensation to allow load controls. We also find that some households that accept load controls at a relatively low compensation require a sizeable compensation to share their electricity consumption information, and vice versa. From the perspective of the contract providers, these findings suggest that information-optional contracts can generate more customers than contracts that bundle households’ consumption information with various load controls.

Keywords: Choice experiment; demand flexibility; direct load control; electricity contract; household heterogeneity (search for similar items in EconPapers)
JEL-codes: D12 Q41 Q48 Q51 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-03-27
New Economics Papers: this item is included in nep-cta, nep-dcm, nep-ene, nep-eur and nep-reg
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3562263 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:slucer:2020_002

Access Statistics for this paper

More papers in CERE Working Papers from CERE - the Center for Environmental and Resource Economics
Bibliographic data for series maintained by Mona Bonta Bergman ().