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Reducing winter peaks in electricity consumption: A choice experiment to structure demand response programs

Similar to other countries around the world, Belgium is going through an energy transition. Even as it increases its shares of renewable energy, it is attempting to phase out its ageing nuclear power plants, which have suffered extensive outages in recent years. These outages – coupled with the challenges of shifting to alternate forms of energy – create a short-to medium-term risk to the security of electricity supply, particularly during winter months, when demand peaks are 15-20% higher than in the summer.

One potential means to offset this risk is to flatten or stagger these demand peaks, in order to reduce the load on the electricity grid, by encouraging flexibility in electricity demand (known as demand response). Utilities can do this by offering time-based electricity pricing structures, to make consumption relatively more expensive during peak times, or by controlling appliance loads using smart meters etc. This can however be challenging to implement in the residential sector, in which electricity consumption behaviour is also influenced by non-price considerations such as routines and convenience.

To better understand these factors, this paper conducts a discrete choice experiment to investigate the acceptability of an appliance load control-based residential demand response program in Belgium during the winter months. It surveys 186 respondents on their willingness to accept limits on the use of home appliances in return for a compensation, and explores how this willingness might be affected by other demographic and moral traits.

Results indicate that respondents are most affected by the days of the week that their appliance usage would be curtailed, and by the compensation they would receive. The willingness to enrol in such a program increases with age, environmental consciousness, home ownership, and lower privacy concerns. The analysis predicts that 95% of the sample could be willing to enrol in a daily load control program for a reasonable compensation of €41 per household per year. Thus, an initial rollout among older and more pro-environment homeowners could be successful, though a wider implementation would require an explanation of its environmental and financial benefits to the population, and a greater consideration of their data privacy concerns.

One limitation of this study is that the compensation listed in the choice set could not be framed in terms of the potential electricity bill savings – making these more evident might further increase the desirability of a DR program. Similarly, the role of heavier appliances such as refrigerators and heating systems was not considered. The recommendations from this paper are based on initial hypotheses that should be tested and validated by future research.

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