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Is our everyday comfort for sale? Preferences for demand management on the electricity market

Thomas Broberg and Lars Persson

Energy Economics, 2016, vol. 54, issue C, 24-32

Abstract: In a European perspective, the electricity markets have been experiencing major changes via deregulation, new technologies and changes in the production mix. Together with the daily and seasonal peak hours on the demand side, the changing markets put pressure on increased flexibility to handle and sustain balance in the grid systems. This paper focuses on the demand side and analyzes preferences related to demand management of Swedish households' energy use. In a web-based choice experiment respondents were faced with three hypothetical electricity contracts. The choices of preferred contracts revealed preferences for attributes related to external control of heating, household electricity and information dissemination (integrity). The results show that people put a substantial value on not being controlled, illustrated by compensations up to thousands of SEK for accepting a contract characterized by external control of energy use in various dimensions. In addition, the results show that household composition, age, gender and income play a role for the perceived discomfort from the external control and information dissemination.

Keywords: Choice experiment; Demand side management; Electricity market; Energy policy; Demand response; Load control; Smart grids (search for similar items in EconPapers)
JEL-codes: D1 Q4 Q5 (search for similar items in EconPapers)
Date: 2016
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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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