Which Households Respond to Electricity Peak Pricing amid High Levels of Electrification?

Cloé Garnache, Øystein Hernaes () and Anders Gravir Imenes ()
Additional contact information
Øystein Hernaes: Ragnar Frisch Centre for Economic Research
Anders Gravir Imenes: University of Oslo

No 15194, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We examine heterogeneity in Norwegian households' price responses to critical peak pricing (CPP) on electricity consumption, using a large-scale randomized controlled trial (RCT), high-frequency electricity data, and default enrollment. Increasing the grid transmission charge by 4,067% (corresponding to an increase in the electricity price by 1,242%) leads to a 12.5% reduction in consumption, and virtually eliminates the consumption "peak". In contrast to prior studies from less electrified countries, the effect is broad-based, and similar across income groups. These findings provide a unique lens into the effectiveness of demand-based policies, and their impact across household groups, in a more electrified future.

Keywords: critical peak pricing; grid transmission charge; peak demand; household heterogeneity; RCT; default enrollment; electrification (search for similar items in EconPapers)
JEL-codes: C93 D12 L94 Q41 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2022-03
New Economics Papers: this item is included in nep-reg
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Citations: View citations in EconPapers (1)

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