Take the Load Off: Time and Technology as Determinants of Electricity Demand Response

Megan Bailey (), David Brown, Blake Shaffer and Frank A. Wolak ()
Additional contact information
Megan Bailey: University of Calgary
Frank A. Wolak: Stanford University

No 2025-4, Working Papers from University of Alberta, Department of Economics

Abstract: As electricity systems transition toward more variable renewable energy, flexible demand has emerged as a critical tool for grid management. Yet a fundamental question remains: are emerging smart technologies sufficient to unlock demand response, or does human behavior remain the critical barrier? Our field experiment examines this question through a novel approach that individually randomizes peak event timing for each participating household, allowing us to leverage both within-subject and between-subject variation. We compare the response to “peak events” on electricity consumption for households equipped with three distinct demand response programs: a fully automated system requiring no action; app-enabled smart devices requiring minimal effort; and traditional manual adjustments. The results are striking—households with passive, automated responses reduced consumption five times more than those required to take any action at all, even when the burden is greatly reduced via smart technology. The provision of enabling technologies alone made no difference in households’ responsiveness, as compared to a fully manual setting, when active participation was still required. These findings reveal that the opportunity cost of time and effort —not technology limitations—may be the fundamental obstacle to unlocking electricity demand flexibility. To achieve its full potential, “smart home” technologies need to incorporate these behavioral realities as barriers to responsiveness.

Keywords: Demand Response; Electricity; Field Experiment; Household Production (search for similar items in EconPapers)
JEL-codes: C93 L94 Q41 Q48 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2025-05-27
New Economics Papers: this item is included in nep-exp
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Working Paper: Take the Load Off: Time and Technology as Determinants of Electricity Demand Response (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2025_004

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