Impacts of Responsive Load in PJM: Load Shifting and Real Time Pricing

Kathleen Spees and Lester Lave

The Energy Journal, 2008, vol. 29, issue 2, 101-122

Abstract: In PJM, 15% of electric generation capacity ran less than 96 hours, 1.1% of the time, over 2006. If retail prices reflected hourly wholesale market prices, customers would shift consumption away from peak hours and installed capacity could drop. We use PJM data to estimate consumer and producer savings from a change toward real-time pricing (RTP) or time-of-use (TOU) pricing. Surprisingly, neither RTP nor TOU has much effect on average price under plausible short-term consumer responses. Consumer plus producer surplus rises 2.8%-4.4% with RTP and 0.6%-1.0% with TOU. Peak capacity savings are seven times larger with RTP. Peak load drops by 10.4%-17.7% with RTP and only 1.1%-2.4% with TOU. Half of all possible customer savings from load shifting are obtained by shifting only 1.7% of all MWh to another time of day, indicating that only the largest customers need be responsive to get the majority of the short-run savings.

Keywords: Electricity generation; real-time-pricing (RTP); TOU. Load shifting; PJM (search for similar items in EconPapers)
Date: 2008
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:29:y:2008:i:2:p:101-122

DOI: 10.5547/ISSN0195-6574-EJ-Vol29-No2-6

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