Real-time pricing when some consumers resist in saving electricity

Evens Salies

Energy Policy, 2013, vol. 59, issue C, 843-849

Abstract: Successful real-time electricity pricing depends firstly upon consumers' willingness to subscribe to such terms and, secondly, on their ability to curb consumption levels. The present paper addresses both issues by considering consumers differentiated by their electricity saving costs, half of whom resist saving electricity. We demonstrate that when consumers are free to adopt real-time prices, producers prefer charging inefficient prices and, in so doing, discriminate against that portion of the consumer population which faces no saving costs. We also find that efficient marginal cost pricing is feasible, but is incompatible with mass adoption of real-time prices.

Keywords: Real-time pricing; Energy conservation; Price discrimination (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:59:y:2013:i:c:p:843-849

DOI: 10.1016/j.enpol.2013.04.050

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