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Demand-Side Management in Fully Electrified Homes

Author

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  • Cloé Garnache
  • Øystein Hernæs
  • Anders Gravir Imenes

Abstract

We report the results of a critical peak pricing (CPP) experiment conducted in an environment where homes are fully electrified, including both room and water heating. When a CPP with day-ahead SMS announcements is applied to the afternoon peak, creating a 10-fold increase in the electricity price, electricity consumption decreases by 15.3%, virtually eliminating that peak. The largest responses come from electric vehicle (EV) households. Also, unlike households without EVs who make reductions without compensating later, EV households respond to the CPP by shifting load to off-peak and next-day use. In our experiment, where higher-income households are disproportionately likely to own EVs, we find that demand reductions induced by the CPP are similar across income groups. Our results support the view that increased electrification may not only lead to a greater need for demand-side management but also enhance the flexibility in how households can and are willing to respond.

Suggested Citation

  • Cloé Garnache & Øystein Hernæs & Anders Gravir Imenes, 2025. "Demand-Side Management in Fully Electrified Homes," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 12(2), pages 257-283.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/731607
    DOI: 10.1086/731607
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