IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v187y2024ics0301421524000399.html
   My bibliography  Save this article

Time of use pricing and likelihood of shifting energy activities, strategies, and timing

Author

Listed:
  • Muttaqee, Mahmood
  • Stelmach, Greg
  • Zanocco, Chad
  • Flora, June
  • Rajagopal, Ram
  • Boudet, Hilary S.

Abstract

Time of Use (TOU) pricing charges higher electricity rates during peak demand windows. Utilities are increasingly deploying TOU pricing to match demand to supplies from renewables. From a survey of 804 California households, we analyze respondents’ reported likelihood of shifting energy-using activities under TOU pricing, their preferred time slots and strategies for shifting. Among the activities offered, respondents reported the most flexibility for shifting cleaning activities and the least for entertainment and cooking. Most preferred midday or late night to shift. Favored strategies included using appliances more efficiently, manually shifting activities, and changing appliance settings over costlier or technology-oriented strategies. Respondents from lower income households, those who owned or intended to purchase more smart home technologies, and those that adhered to rules pertaining to electricity use reported more willingness to shift activities. Our findings suggest that TOU policies could have less impact than predicted since some respondents already completed major energy-using activities outside TOU windows and were unwilling to shift others. Moreover, the popularity of late-night shifts might create alternative peaks that could strain renewable sources, particularly in combination with electric vehicle adoption and charging. The higher willingness expressed by low-income households suggests potential equity concerns of TOU policies.

Suggested Citation

  • Muttaqee, Mahmood & Stelmach, Greg & Zanocco, Chad & Flora, June & Rajagopal, Ram & Boudet, Hilary S., 2024. "Time of use pricing and likelihood of shifting energy activities, strategies, and timing," Energy Policy, Elsevier, vol. 187(C).
  • Handle: RePEc:eee:enepol:v:187:y:2024:i:c:s0301421524000399
    DOI: 10.1016/j.enpol.2024.114019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421524000399
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.enpol.2024.114019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Siobhan Powell & Gustavo Vianna Cezar & Liang Min & Inês M. L. Azevedo & Ram Rajagopal, 2022. "Charging infrastructure access and operation to reduce the grid impacts of deep electric vehicle adoption," Nature Energy, Nature, vol. 7(10), pages 932-945, October.
    2. Lee V. White & Nicole D. Sintov, 2018. "Inaccurate consumer perceptions of monetary savings in a demand-side response programme predict programme acceptance," Nature Energy, Nature, vol. 3(12), pages 1101-1108, December.
    3. Dong Gu Choi & Michael K. Lim & Karthik Murali & Valerie M. Thomas, 2020. "Why Have Voluntary Time‐of‐Use Tariffs Fallen Short in the Residential Sector?," Production and Operations Management, Production and Operations Management Society, vol. 29(3), pages 617-642, March.
    4. Stelmach, Greg & Zanocco, Chad & Flora, June & Rajagopal, Ram & Boudet, Hilary S., 2020. "Exploring household energy rules and activities during peak demand to better determine potential responsiveness to time-of-use pricing," Energy Policy, Elsevier, vol. 144(C).
    5. Shuchen Cong & Destenie Nock & Yueming Lucy Qiu & Bo Xing, 2022. "Unveiling hidden energy poverty using the energy equity gap," Nature Communications, Nature, vol. 13(1), pages 1-12, December.
    6. Yunusov, Timur & Torriti, Jacopo, 2021. "Distributional effects of Time of Use tariffs based on electricity demand and time use," Energy Policy, Elsevier, vol. 156(C).
    7. Zanocco, C. & Flora, J. & Rajagopal, R. & Boudet, H., 2021. "Exploring the effects of California's COVID-19 shelter-in-place order on household energy practices and intention to adopt smart home technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 139(C).
    8. Lee V. White & Nicole D. Sintov, 2020. "Health and financial impacts of demand-side response measures differ across sociodemographic groups," Nature Energy, Nature, vol. 5(1), pages 50-60, January.
    9. Torriti, Jacopo, 2012. "Price-based demand side management: Assessing the impacts of time-of-use tariffs on residential electricity demand and peak shifting in Northern Italy," Energy, Elsevier, vol. 44(1), pages 576-583.
    10. Hilary Boudet & Chad Zanocco & Greg Stelmach & Mahmood Muttaqee & June Flora, 2021. "Public preferences for five electricity grid decarbonization policies in California," Review of Policy Research, Policy Studies Organization, vol. 38(5), pages 510-528, September.
    11. Chen, Xiao & Zanocco, Chad & Flora, June & Rajagopal, Ram, 2022. "Constructing dynamic residential energy lifestyles using Latent Dirichlet Allocation," Applied Energy, Elsevier, vol. 318(C).
    12. Katrina Jessoe & David Rapson, 2014. "Knowledge Is (Less) Power: Experimental Evidence from Residential Energy Use," American Economic Review, American Economic Association, vol. 104(4), pages 1417-1438, April.
    13. Lijesen, Mark G., 2007. "The real-time price elasticity of electricity," Energy Economics, Elsevier, vol. 29(2), pages 249-258, March.
    14. Matthew Harding & Steven Sexton, 2017. "Household Response to Time-Varying Electricity Prices," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 337-359, October.
    15. Swantje Sundt, 2021. "Influence of Attitudes on Willingness to Choose Time-of-Use Electricity Tariffs in Germany. Evidence from Factor Analysis," Energies, MDPI, vol. 14(17), pages 1-20, August.
    16. Matthew Harding & Steven Sexton, 2017. "Household Response to Time-Varying Electricity Prices," Annual Review of Resource Economics, Annual Reviews, vol. 9(1), pages 337-359, October.
    17. Mads Raunbak & Timo Zeyer & Kun Zhu & Martin Greiner, 2017. "Principal Mismatch Patterns Across a Simplified Highly Renewable European Electricity Network," Energies, MDPI, vol. 10(12), pages 1-13, November.
    18. Paul L. Joskow & Catherine D. Wolfram, 2012. "Dynamic Pricing of Electricity," American Economic Review, American Economic Association, vol. 102(3), pages 381-385, May.
    19. Parag, Yael, 2021. "Which factors influence large households’ decision to join a time-of-use program? The interplay between demand flexibility, personal benefits and national benefits," Renewable and Sustainable Energy Reviews, Elsevier, vol. 139(C).
    20. Felix Creutzig & Leila Niamir & Xuemei Bai & Max Callaghan & Jonathan Cullen & Julio Díaz-José & Maria Figueroa & Arnulf Grubler & William F. Lamb & Adrian Leip & Eric Masanet & Érika Mata & Linus Mat, 2022. "Demand-side solutions to climate change mitigation consistent with high levels of well-being," Nature Climate Change, Nature, vol. 12(1), pages 36-46, January.
    21. Ribó-Pérez, David & Heleno, Miguel & Álvarez-Bel, Carlos, 2021. "The flexibility gap: Socioeconomic and geographical factors driving residential flexibility," Energy Policy, Elsevier, vol. 153(C).
    22. Boudet, Hilary S. & Flora, June A. & Armel, K. Carrie, 2016. "Clustering household energy-saving behaviours by behavioural attribute," Energy Policy, Elsevier, vol. 92(C), pages 444-454.
    23. Chad Zanocco & Tao Sun & Gregory Stelmach & June Flora & Ram Rajagopal & Hilary Boudet, 2022. "Assessing Californians’ awareness of their daily electricity use patterns," Nature Energy, Nature, vol. 7(12), pages 1191-1199, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stelmach, Greg & Zanocco, Chad & Flora, June & Rajagopal, Ram & Boudet, Hilary S., 2020. "Exploring household energy rules and activities during peak demand to better determine potential responsiveness to time-of-use pricing," Energy Policy, Elsevier, vol. 144(C).
    2. Garnache, Cloé & Hernaes, Øystein & Imenes, Anders Gravir, 2022. "Which Households Respond to Electricity Peak Pricing amid High Levels of Electrification?," IZA Discussion Papers 15194, Institute of Labor Economics (IZA).
    3. Fabra, Natalia, 2021. "The energy transition: An industrial economics perspective," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    4. Harding, Matthew & Kettler, Kyle & Lamarche, Carlos & Ma, Lala, 2023. "The (alleged) environmental and social benefits of dynamic pricing," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 574-593.
    5. Blonz, Joshua & Palmer, Karen & Wichman, Casey & Wietelman, Derek C., 2021. "Smart Thermostats, Automation, and Time-Varying Prices," RFF Working Paper Series 21-20, Resources for the Future.
    6. Wong, Pui Ting & Rau, Henrike, 2023. "Time of Use tariffs, childcare and everyday temporalities in the US and China: Evidence from time-use and sequence-network analysis," Energy Policy, Elsevier, vol. 172(C).
    7. Harding, Matthew & Lamarche, Carlos, 2019. "A panel quantile approach to attrition bias in Big Data: Evidence from a randomized experiment," Journal of Econometrics, Elsevier, vol. 211(1), pages 61-82.
    8. Leslie A. Martin, 2022. "Driving on Sunbeams: Interactions Between Price Incentives for Electric Vehicles, Residential Solar Photovoltaics and Household Battery Systems," Economic Papers, The Economic Society of Australia, vol. 41(4), pages 369-384, December.
    9. Gosnell, Greer & McCoy, Daire, 2023. "Market failures and willingness to accept smart meters: Experimental evidence from the UK," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    10. Jing Liang & Yueming Qiu & Bo Xing, 2021. "Social Versus Private Benefits of Energy Efficiency Under Time-of-Use and Increasing Block Pricing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(1), pages 43-75, January.
    11. Hirth, Lion & Khanna, Tarun M. & Ruhnau, Oliver, 2024. "How aggregate electricity demand responds to hourly wholesale price fluctuations," Energy Economics, Elsevier, vol. 135(C).
    12. Hirth, Lion & Khanna, Tarun & Ruhnau, Oliver, 2023. "How aggregate electricity demand responds to hourly wholesale price fluctuations," EconStor Preprints 272048, ZBW - Leibniz Information Centre for Economics.
    13. Kapeller, Rudolf & Cohen, Jed J. & Kollmann, Andrea & Reichl, Johannes, 2023. "Incentivizing residential electricity consumers to increase demand during periods of high local solar generation," Energy Economics, Elsevier, vol. 127(PA).
    14. John List & Ioannis Pragidis & Michael Price, 2024. "Toward an Understanding of the Economics of Prosumers: Evidence from a Natural Field Experiment in Energy," Natural Field Experiments 00791, The Field Experiments Website.
    15. Carsten Helm & Mathias Mier, 2020. "Steering the Energy Transition in a World of Intermittent Electricity Supply: Optimal Subsidies and Taxes for Renewables Storage," ifo Working Paper Series 330, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    16. Gianluca Trotta & Kirsten Gram-Hanssen & Pernille Lykke Jørgensen, 2020. "Heterogeneity of Electricity Consumption Patterns in Vulnerable Households," Energies, MDPI, vol. 13(18), pages 1-17, September.
    17. Leanne S. Giordono & June Flora & Chad Zanocco & Hilary Boudet, 2022. "Food Practice Lifestyles: Identification and Implications for Energy Sustainability," IJERPH, MDPI, vol. 19(9), pages 1-19, May.
    18. Parag, Yael, 2021. "Which factors influence large households’ decision to join a time-of-use program? The interplay between demand flexibility, personal benefits and national benefits," Renewable and Sustainable Energy Reviews, Elsevier, vol. 139(C).
    19. Gerarden, Todd D. & Newell, Richard G. & Stavins, Robert N. & Stowe, Robert C., 2015. "An Assessment of the Energy-Efficiency Gap and Its Implications for Climate Change Policy," Climate Change and Sustainable Development 202116, Fondazione Eni Enrico Mattei (FEEM).
    20. He, Xian & Keyaerts, Nico & Azevedo, Isabel & Meeus, Leonardo & Hancher, Leigh & Glachant, Jean-Michel, 2013. "How to engage consumers in demand response: A contract perspective," Utilities Policy, Elsevier, vol. 27(C), pages 108-122.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:187:y:2024:i:c:s0301421524000399. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.