Barriers to real-time electricity pricing: Evidence from New Zealand

Charles Pébereau and Kevin Remmy

International Journal of Industrial Organization, 2023, vol. 89, issue C

Abstract: This paper studies the introduction of real-time electricity pricing in the New Zealand residential retail market to understand why its market share remained below 1.25%. We use rich panel data of all retail switches between 2014 and 2018 and an unexpected wholesale price spike to study adoption and attrition. Exploiting the staggered roll-out of real-time pricing in different locations we find that attrition decreases with experience. We also find that prospective adopters are present biased. The combination of these findings explains why adoption stalled and shows that wholesale price spikes pose a serious threat to widespread adoption of real-time pricing.

Keywords: Energy; Time-varying pricing; Consumer behavior; Learning (search for similar items in EconPapers)
JEL-codes: D12 D83 D91 L52 L81 L94 Q41 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:89:y:2023:i:c:s0167718723000607

DOI: 10.1016/j.ijindorg.2023.102979

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