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Strategic management of residential electric services in the competitive market: Demand-oriented perspective

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  • Dongnyok Shim
  • Seung Wan Kim
  • Jörn Altmann

Abstract

This paper aims to empirically investigate consumers’ preference structures and their willingness to pay for key features of future residential electric power services that they have not experienced in the regulated market. Using a choice experiment based on conjoint survey and applying a mixed logit model, we quantitatively estimate individual utility functions for certain important attributes such as type of service-providing company, installation of smart meter devices, introduction of E-prosumer groups, relaxation of progressive electricity billing system, and share of renewable energy in the generation mix. The analysis reveals that households prefer installation of smart meter devices and introduction of E-prosumer groups, and are willing to pay 10,044 KRW/year (USD 8.97/year) and 5,222 KRW/year (USD 4.66/year), respectively, for these services. However, households dislike the participation of privately-owned companies under the competitive market structure, owing to the possibility of a rise in the electricity price.

Suggested Citation

  • Dongnyok Shim & Seung Wan Kim & Jörn Altmann, 2018. "Strategic management of residential electric services in the competitive market: Demand-oriented perspective," Energy & Environment, , vol. 29(1), pages 49-66, February.
    • Handle: RePEc:sae:engenv:v:29:y:2018:i:1:p:49-66
    DOI: 10.1177/0958305X17740234
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    Cited by:

    1. Dongnyok Shim & Seung Wan Kim & Jörn Altmann & Yong Tae Yoon & Jin Gyo Kim, 2018. "Key Features of Electric Vehicle Diffusion and Its Impact on the Korean Power Market," Sustainability, MDPI, vol. 10(6), pages 1-18, June.
    2. Hyo-Jin Kim & Seul-Ye Lim & Seung-Hoon Yoo, 2020. "The South Korean public’s evaluation of the mix of power generation sources: A choice experiment study," Energy & Environment, , vol. 31(7), pages 1181-1190, November.
    3. Bernadeta Gołębiowska, 2020. "Preferences for demand side management—a review of choice experiment studies," Working Papers 2020-05, Faculty of Economic Sciences, University of Warsaw.

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