Quantifying Customer Response to Dynamic Pricing

Demand response experience in Europe: Policies, programmes and implementation

“…In principle DR initiatives can bring about significant reductions in electricity prices, as shifts of demand during peaks could reduce the need for higher marginal cost generation, offer lower cost system balancing and decrease grid reinforcement investment [2]. DR initiatives can also play a valuable role in achieving ambitious environmental policy objectives, through facilitating greater connection of intermittent renewable generation.…”

Demand response in U.S. electricity markets: Empirical evidence

“…Working with the Lawrence Berkeley National Laboratory, the Organization of Midwest's Demand Response Initiative (MWDRI) 8 and the Southwest Power Pool each commissioned a detailed survey of the design features, operational triggers used to call events (e.g., system emergencies, market conditions, local emergencies), DR resource availability (e.g. seasonal, annual), participant incentive structures, and historic performance of existing DR programs and dynamic pricing tariffs offered by load serving entities in each ISO/RTO [16 -17].…”

“…[1,2] 1 This concept of demand response can be traced to the beginnings of the U.S. electric power industry (circa early-to mid-1890s), where system engineers and utility executives debated the optimal pricing regime for this new found service: Hopkinson's demand charge or time-of-day differentiated rates [6]. The universe of time-based retail rates has expanded significantly from these early days of the industry to now include real-time pricing (RTP), critical peak pricing (CPP) and variations thereof [2,3,7,8].…”

Integrated retail and wholesale power system operation with smart-grid functionality

“…For example, Borenstein and Holland [17] point out that implementing RTP may not be cost-effective in light of the incremental billing and sophisticated metering costs. Also, the study of Faruqui and George [18] suggests that small customers are reluctant to shift energy usage in response to price signals. Using these and other related studies as basic background materials, we plan to explore the extent to which consumers would benefit from the availability of RTP contracts.…”