Nudging electricity consumption using TOU pricing and feedback: evidence from Irish households

Cosmo, Valeria Di; O’Hora, Denis

doi:10.1016/j.joep.2017.03.005

Cited by 35 publications

(9 citation statements)

References 23 publications

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“…It may reflect a belief among consumers that choosing a ToU tariff will lead them to make substantial changes to when they use electricity. However, the true extent of behaviour change induced by a ToU tariff may depend on how feedback is supplied to households and characteristics of householders (Di Cosmo and O'Hora, 2017). The ultimate impact on consumer welfare is therefore not straightforward and requires further study.…”

Section: Discussionmentioning

confidence: 99%

Efficient ways of communicating time-of-use electricity tariffs in Ireland: Plain and simple

Barjaková¹,

Belton²,

Purcell³

et al. 2021

Preprint

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With the ongoing rollout of smart meters in Ireland, time-of-use (ToU) tariffs are currently being introduced as a new way to pay for electricity. Such tariffs can bring important benefits to both consumers and society, in terms of reduced electricity bills and CO2 emissions, respectively. At the same time, some consumers may find it more difficult to benefit from ToU tariffs than others. Communication around ToU tariffs thus needs to explain both benefits and challenges successfully; it needs to encourage ToU uptake, while enhancing comprehension. This paper presents results from a pre-registered experiment that pre-tested behaviourally-informed communications on ToU tariffs. A large, representative sample of consumers (n=1,300) viewed an experimentally manipulated primer on ToU tariffs before completing a series of tasks to measure their views, objective comprehension, and tariff choices. In general, consumers were positive towards ToU tariffs, viewing monetary savings as a primary benefit. Environmental framing of information enhanced positivity among younger participants. Comprehension and choice quality were rather modest, but improved when tariff examples were presented in a plain table, compared to 24h clock formats. This finding is important as the latter are commonly used in the market. The study demonstrates the benefit of experimentally pre-testing policy interventions.

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Section: Discussionmentioning

confidence: 99%

Efficient ways of communicating time-of-use electricity tariffs in Ireland: Plain and simple

Barjaková¹,

Belton²,

Purcell³

et al. 2021

Preprint

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show abstract

“…These experiments find that there is a negative relation between high peak prices and consumption, but the magnitude of these effects was not constant between the experiments, varying between 3 and 6%. Reaction of consumers is typically higher in peak times, but the estimated elasticities are quite low for the remaining hours of the day (Di Cosmo and O'Hora, 2017).…”

Section: Introductionmentioning

confidence: 93%

From Forward to Spot Prices: Producers, Retailers and Loss Averse Consumers in Electricity Markets

Cosmo

Trujillo-Baute

2019

SSRN Journal

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The benefits of smoothing demand peaks in the electricity market has been widely recognised. European countries such Spain and some of the Scandinavian countries have recently given to the consumers the possibility to face the spot prices instead of having a fixed tariffs determined by retailers. This paper develops a theoretical model to study the relations between risk averse consumers, retailers and producers, both in the spot and in the forward markets when consumers are able to choose between fixed tariffs and the wholesale prices. The model is calibrated on a real market case-Spain-where since 2014 spot tariffs were introduced beside the flat tariffs for household consumers. Finally, simulations of agents behavior and markets performance, depending on consumers risk aversion and the number of producers, are used to analyse the implications from the model. Our results show that the quantities the retailers and the producers trade in the forward market are positively related with the loss aversion of consumers. The quantities bought by the retailers in the forward market are negatively related with the skewness of the spot prices. On the contrary, quantity sold forward by producers are positively related with the skewness of the spot prices (high probability of getting high prices increase the forward sale) and with the total market demand. In the spot market, the degree of loss aversion of consumers determine the quantity the retailers buy in the spot market but does not have a direct effect on the spot prices.

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“…However, the Irish Commission for Energy Regulation [24] found that time-of-use (ToU) tariffs do reduce electricity usage, and that higher-consuming households tended to deliver greater reductions. Muratori et al [15] found that shifting consumption may lead to steeper rebound peaks, while Cosmo and O'Hora [25], using differencein-difference estimates, found that reductions lasted beyond the peak period and that post-peak spikes in usage were not observed. Overall, Parrish et al [26] find through a systematic review that customer responses can vary considerably for many reasons and that DR modeling can yield more optimistic results than actual trials, while Srivastava et al [27] note that response is also dependent on contextual factors.…”

Section: Literature On Household Response To Drmentioning

confidence: 99%

Dissecting demand response: A quantile analysis of flexibility, household attitudes, and demographics

Srivastava

Passel

Laes³

2019

Energy Research & Social Science

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Nudging electricity consumption using TOU pricing and feedback: evidence from Irish households

Cited by 35 publications

References 23 publications

Efficient ways of communicating time-of-use electricity tariffs in Ireland: Plain and simple

Efficient ways of communicating time-of-use electricity tariffs in Ireland: Plain and simple

From Forward to Spot Prices: Producers, Retailers and Loss Averse Consumers in Electricity Markets

Dissecting demand response: A quantile analysis of flexibility, household attitudes, and demographics

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