University of Oulu

Enni Ruokamo, Maria Kopsakangas-Savolainen, Teemu Meriläinen, Rauli Svento, Towards flexible energy demand – Preferences for dynamic contracts, services and emissions reductions, Energy Economics, Volume 84, 2019, 104522, ISSN 0140-9883, https://doi.org/10.1016/j.eneco.2019.104522

Towards flexible energy demand : preferences for dynamic contracts, services and emissions reductions

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Author: Ruokamo, Enni1,2; Kopsakangas-Savolainen, Maria1,2; Meriläinen, Teemu1,2;
Organizations: 1Department of Economics, Accounting and Finance, Oulu Business School, P.O. Box 8000, FI-90014, University of Oulu, Finland
2Finnish Environment Institute, SYKE, Oulu Office, P.O.Box 413, FI-90014, University of Oulu, Finland
Format: article
Version: accepted version
Access: embargoed
Persistent link: http://urn.fi/urn:nbn:fi-fe202002064707
Language: English
Published: Elsevier, 2019
Publish Date: 2021-10-15
Description:

Abstract

Households’ preferences for attributes of flexible energy demand are not well understood. This paper evaluates Finnish households’ acceptance of hypothetical contracts and services aimed at increasing demand side flexibility. We conduct a Choice Experiment to analyze households’ willingness to offer flexibility through timing their electricity usage and heating; their interest in dynamic pricing contracts such as real-time pricing, two-rate tariffs, or power-based tariffs; and how emissions reductions affect their choices. The results indicate that households’ sensitivity to restrictions in electricity usage is much stronger than their sensitivity to restrictions in heating. Households also require considerable compensation to choose real-time pricing over fixed fees. Furthermore, other value-creating elements besides monetary compensation could incentivize households to offer demand side flexibility because they value reductions in CO₂ emissions at the power system level.

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Series: Energy economics
ISSN: 0140-9883
ISSN-E: 1873-6181
ISSN-L: 0140-9883
Volume: 84
Article number: 104522
DOI: 10.1016/j.eneco.2019.104522
OADOI: https://oadoi.org/10.1016/j.eneco.2019.104522
Type of Publication: A1 Journal article – refereed
Field of Science: 512 Business and management
Subjects:
Funding: This work was supported by the Academy of Finland Strategic Research Council project BC-DC (AKA292854); the Academy of Finland project on regulation and dynamic pricing for energy systems REDYFLEX (288957); the Tauno Tönning Foundation; and the Maj and Tor Nessling Foundation.
Academy of Finland Grant Number: 292854
288957
Detailed Information: 292854 (Academy of Finland Funding decision)
288957 (Academy of Finland Funding decision)
Copyright information: © 2019. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/.
  https://creativecommons.org/licenses/by-nc-nd/4.0/