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The mitigating effect of strategic behavior on the net benefits of a direct load control program

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  • Lang, Corey
  • Okwelum, Edson

Abstract

Demand response is an important tool for utilities to manage load during peak periods. While the effects of demand response programs on peak load reductions are well studied and intuitive, assessments typically fail to recognize the potential for off-peak behavioral responses that may mitigate the total benefits of the program. Using smart meter consumption data on residential air conditioning units enrolled in a direct load control program, this paper examines the changes in consumption prior to and after curtailment events. The results suggest substantial increases in off-peak consumption, which reduce energy, monetary, and environmental benefits of the program by over 40%.

Suggested Citation

  • Lang, Corey & Okwelum, Edson, 2015. "The mitigating effect of strategic behavior on the net benefits of a direct load control program," Energy Economics, Elsevier, vol. 49(C), pages 141-148.
    • Handle: RePEc:eee:eneeco:v:49:y:2015:i:c:p:141-148
    DOI: 10.1016/j.eneco.2015.01.025
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    Cited by:

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    2. Alimohammadisagvand, Behrang & Jokisalo, Juha & Sirén, Kai, 2018. "Comparison of four rule-based demand response control algorithms in an electrically and heat pump-heated residential building," Applied Energy, Elsevier, vol. 209(C), pages 167-179.
    3. Grimm, Veronika & Orlinskaya, Galina & Schewe, Lars & Schmidt, Martin & Zöttl, Gregor, 2021. "Optimal design of retailer-prosumer electricity tariffs using bilevel optimization," Omega, Elsevier, vol. 102(C).
    4. Michael Pahle, Wolf-Peter Schill, Christian Gambardella, and Oliver Tietjen, 2016. "Renewable Energy Support, Negative Prices, and Real-time Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Sustainab).
    5. Gill, Carrie & Lang, Corey, 2018. "Learn to conserve: The effects of in-school energy education on at-home electricity consumption," Energy Policy, Elsevier, vol. 118(C), pages 88-96.
    6. Sana Iqbal & Mohammad Sarfraz & Mohammad Ayyub & Mohd Tariq & Ripon K. Chakrabortty & Michael J. Ryan & Basem Alamri, 2021. "A Comprehensive Review on Residential Demand Side Management Strategies in Smart Grid Environment," Sustainability, MDPI, vol. 13(13), pages 1-23, June.
    7. Amit Shewale & Anil Mokhade & Nitesh Funde & Neeraj Dhanraj Bokde, 2022. "A Survey of Efficient Demand-Side Management Techniques for the Residential Appliance Scheduling Problem in Smart Homes," Energies, MDPI, vol. 15(8), pages 1-34, April.

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    More about this item

    Keywords

    Demand response; Pre-cooling; Snapback; Strategic behavior; Breakpoints;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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