Impact of real-time pricing and residential load automation on distribution systems

Marie-Louise Arlt, David Chassin, Claudio Rivetta and James Sweeney

Energy Policy, 2024, vol. 184, issue C

Abstract: Price-responsive electricity consumption can facilitate the efficient operations of power systems. In this paper, we study the impact of real-time pricing (RTP) and the automation of a major residential load – Heating, Ventilation, and Air Conditioning (HVAC) systems – on residential distribution systems. First, we deploy a simulation-based case study of 437 houses in Austin, Texas, which we calibrate based on real-world data. Second, we study the implications of switching from a fixed retail rate to RTP. We estimate aggregate welfare gains of 39 USD per customer and year. All customers contribute to the welfare gain, but not equally. Moreover, all customers benefit and benefits are higher for customers with electric heating, lower comfort preference, and lower thermal insulation. However, RTP and load automation can critically increase peak system load by more than 30%. Third, we study the introduction of a market-based demand management system under which the local RTP increases if congestion is present. In this case, for reasonable specifications, another 12% of welfare gains can be realized during operations. Moreover, optimal grid investment can be reduced. Our work informs policy makers by illustrating under which conditions load automation under RTP can be particularly beneficial.

Keywords: Load automation; Distribution systems; Local electricity markets; Demand management systems (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421523004913
Full text for ScienceDirect subscribers only

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:eee:enepol:v:184:y:2024:i:c:s0301421523004913

DOI: 10.1016/j.enpol.2023.113906

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().