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Residents' willingness to be compensated for power rationing during peak hours based on choice experiment

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  • Xu, Shuling
  • Yang, Zihan
  • Deng, Nana
  • Wang, Bo

Abstract

There is growing interest in demand-side interventions aimed at reducing residential peak-hour electricity consumption in response to energy transition. However, limited knowledge exists regarding residents' willingness to accept compensation (WTC) for power rationing during peak hours. This study empirically evaluates the compensation standards based on residents' willingness to accept power rationing in peak hours based on the Choice Experiment (CE). The results indicate that residents are concerned most with the attributes of power rationing seasons and power rationing periods, requiring higher compensation for power rationing in summer and at night, whether on weekdays or non-weekdays. Further analysis reveals significant regional and group heterogeneity. Specifically, residents in northern regions are not significantly concerned about the power rationing durations compared to those in southern regions, while they are more on power rationing degrees. Analysis based on the Latent Class Analysis (LCA) model shows that two classes of residents are willing to participate in the power rationing agreement for free on both weekdays and non-weekdays, as well as two categories of residents unwilling to participate in the compensated power rationing on non-weekdays. Based on this, we estimate that the adjusted participation rate of residents in compensated power rationing is 96.59% on weekdays, with compensation ranges from 0.67 ￥/kWh to 13.38 ￥/kWh, and a participation rate of 69.69% on non-weekdays, with compensation levels ranging from 3.99 ￥/kWh to 15.34 ￥/kWh. This paper also assesses the costs of power rationing compensation to provide evidence for policymakers when determining the compensation level of the power rationing program.

Suggested Citation

  • Xu, Shuling & Yang, Zihan & Deng, Nana & Wang, Bo, 2024. "Residents' willingness to be compensated for power rationing during peak hours based on choice experiment," Applied Energy, Elsevier, vol. 367(C).
    • Handle: RePEc:eee:appene:v:367:y:2024:i:c:s0306261924007189
    DOI: 10.1016/j.apenergy.2024.123335
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