Is Our Everyday Comfort for Sale? Preferences for Demand Management on the Electricity Market

19 Pages Posted: 9 Jun 2015

See all articles by Thomas Broberg

Thomas Broberg

University of Umea - Centre for Environmental and Resource Economics

Lars Persson

University of Umea - Centre for Environmental and Resource Economics

Date Written: June 8, 2015

Abstract

In a European perspective, the electricity markets have been experiencing major changes via deregulation, new technologies and changes in the production mix. Together with the daily and seasonal peak hours on the demand side, the changing markets put pressure on increased flexibility to handle and sustain balance in the grid systems. This paper focuses on the demand side and analyzes preferences related to demand management of Swedish households energy use. Preferences are analyzed within the framework of choice experiments and people are faced with hypothetical electricity contracts. The respondents reveal their preferences for attributes related to external control of heating, household electricity and information dissemination (integrity).

The results show that people put a substantial value on not being controlled, illustrated by compensations up to thousands of SEK for accepting a contract characterized by external control of energy use in various dimensions. In addition, the results show that household composition, age, gender and income play a role for the perceived discomfort from the external control and information dissemination.

Keywords: choice experiment, demand side management, electricity market, energy policy, demand flexibility, smart grids

JEL Classification: Q40, Q41

Suggested Citation

Broberg, Thomas and Persson, Lars, Is Our Everyday Comfort for Sale? Preferences for Demand Management on the Electricity Market (June 8, 2015). Available at SSRN: https://ssrn.com/abstract=2615874 or http://dx.doi.org/10.2139/ssrn.2615874

Thomas Broberg (Contact Author)

University of Umea - Centre for Environmental and Resource Economics ( email )

Lars Persson

University of Umea - Centre for Environmental and Resource Economics ( email )

UmeƄ, S-901 87
Sweden

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