Empowered? Examining self-disconnection in a postal survey of electricity prepayment meter consumers in New Zealand

Prepayment metering is an electricity payment method often used by low-income consumers. Fuel poverty is an important public health problem in New Zealand, and is likely to be a particular problem for those using prepayment metering. This paper details a nationwide postal survey of consumers undertaken with the support of three major electricity retailers, which investigated the advantages and disadvantages of using prepayment metering from a consumer perspective. The study surveyed a total pool of 359 randomly selected consumers across the three companies, a response rate of 48%. The study found that while almost all respondents felt the benefits of using prepayment outweighed the risks of running out of credit or ‘self-disconnection’, 53% of respondents experienced self-disconnection in the past year. Of concern, over a third of respondents experiencing self-disconnection were without electricity for more than 12 h. The frequency of self-disconnection was also high, with 17% of those disconnecting reporting six or more events in the past year. Government intervention could reduce the risks and disadvantages involved with using prepayment metering, which could then support initiatives aimed at reducing fuel poverty.     

Smart meter devices and the effect of feedback on residential electricity consumption: Evidence from a natural experiment in Northern Ireland

Using a unique set of data and exploiting a large-scale natural experiment, we estimate the effect of real-time usage information on residential electricity consumption in Northern Ireland. Starting in April 2002, the utility replaced prepayment meters with advanced meters that allow the consumer to track usage in real-time. We rely on this event, account for the endogeneity of price and payment plan with consumption through a plan selection correction term, and find that the provision of information is associated with a decline in electricity consumption of 11–17%. We find that the reduction is robust to different specifications, selection-bias correction methods and subsamples of the original data. The advanced metering program delivers reasonably cost-effective reductions in carbon dioxide emissions, even under the most conservative usage reduction scenarios.     

Keeping warm? Self-reported housing and home energy efficiency factors impacting on older people heating homes in North Wales

This paper examines a representative sample (N=421$N=421$) of older people (aged 70+) living in rural North Wales with regard to relationships between fuel poverty, feeling cold in one's home and a range of self-reported housing and home energy efficiency items. In the Welsh context, the combination of poor housing stock and low-level income is likely to increase the chance of older people experiencing fuel poverty, therefore the analyses are relevant to both energy and social policy. The paper hypothesises that: (i) People in ‘fuel poor’ homes are: low-income households; living in older houses; lacking home energy efficiency measures; (ii) not all people facing difficulties heating their home (i.e. wearing extra clothing to keep warm during cold spells) are identified as ‘fuel poor’, but there will be an association between taking extra measures to keep warm and low income; older houses and lacking home energy efficiency factors. The results partially support the hypotheses. An estimation is made of the expenditure required to counter the factors associated with fuel poverty and cold homes in the region. The paper concludes with implications for the UK Fuel Poverty Strategy.     

Assessing the consumers’ willingness to adopt a prepayment metering system in Nigeria

Despite the rising popularity in the adoption and usage of prepayment meters, little is still known about the drivers of its adoption. We examine the willingness to adopt prepayment metering (PPM) for a sample of Nigerian households that were not prepayment users. Double-hurdle models were estimated to account for households’ decisions concerning billing system switching behaviour and households’ willingness to pay (WTP). The estimated results revealed that decisions to adopt a prepayment meter are significantly affected by current electricity spending, current billing method and the split incentive problem. Whereas current electricity spending significantly increased the tendency to adopt PPM, the split incentive problem reduced the probability of adoption. Although unmetered consumers were more likely to express a willingness to adopt a PPM system than post-paid customers, they did not intend to pay a significantly higher amount to obtain the prepayment service. Income did not play a significant role in decision-making concerning PPM adoption and the corresponding WTP amount. These results cast doubt on the validity of the widely held belief that low income may be responsible for PPM adoption, reflecting the widespread usage of PPM by low-income households.     

Social norms,trust and control of power theft in Uganda: Does bulk metering work for MSEs?

Power theft is still rampant in many developing countries. Governments and utility providers tend to favor technical solutions, neglecting the socio-economic dimension. This article analyzes the interaction between the socio-economic factors trust, informal social norms, awareness and electricity pricing effect and technical control measures in Uganda. After reforming its power sector, Uganda introduced two technical innovations: bulk metering for micro and small enterprises (MSE) and prepaid metering for households. The bulk metering system imposes a strong form of social control among MSEs. Drawing on semi-structured interviews with 29 MSEs and 16 experts in Uganda, this article shows how well bulk metering works in practice. It finds that trust is key in the relations between electricity user and utility provider, between citizens and government overseeing the energy sector as well as within bulk metering groups of MSEs. The electricity price impacts MSEs' ability to pay and to some extent also their willingness to pay. Finally, power theft used to be accepted as an informal social norm. Change is happening, but is currently undermined by corruption and patronage networks in the energy sector and the political system, impacting people's attitude to compliance – regardless of the privatization of the electricity sector.     

A public perspective on the adoption of microgeneration technologies in New Zealand: A multivariate probit approach

The growing demand for electricity in New Zealand has led to the construction of new hydro-dams or power stations that have had environmental, social and cultural effects. These effects may drive increases in electricity prices, as such prices reflect the cost of running existing power stations as well as building new ones. This study uses Canterbury and Central Otago as case studies because both regions face similar issues in building new hydro-dams and ever-increasing electricity prices that will eventually prompt households to buy power at higher prices. One way for households to respond to these price changes is to generate their own electricity through microgeneration technologies (MGT). The objective of this study is to investigate public perception and preferences regarding MGT and to analyze the factors that influence people’s decision to adopt such new technologies in New Zealand. The study uses a multivariate probit approach to examine households’ willingness to adopt any one MGT system or a combination of the MGT systems. Our findings provide valuable information for policy makers and marketers who wish to promote effective microgeneration technologies.     

The delivery of low-cost,low-carbon rural energy services

The provision of both electrical and mechanical energy services can play a critical role in poverty alleviation for the almost two billion rural users who currently lack access to electricity. Distributed generation using diesel generators remains a common means of electricity provision for rural communities throughout the world. Due to rising fuel costs, the need to address poverty, and consequences of global warming, it is necessary to develop cost efficient means of reducing fossil fuel consumption in isolated diesel microgrids. Based on a case study in Nicaragua, a set of demand and supply side measures are ordered by their annualized costs in order to approximate an energy supply curve. The curve highlights significant opportunities for reducing the costs of delivering energy services while also transitioning to a carbon-free electrical system. In particular, the study demonstrates the significant cost savings resulting from the implementation of conventional metering, efficient residential lighting, and electricity generation using renewable energy sources.     

Accelerating residential PV expansion: demand analysis for competitive electricity markets

This article quantifies the potential market for grid-connected, residential photovoltaic (PV) electricity integrated into new homes built in the US. It complements an earlier supply-side analysis by the authors that demonstrates the potential to reduce PV module prices below $1.5/W_p by scaling up existing thin-film technology in 100 MW_p/yr manufacturing facilities. The present article demonstrates that, at that price, PV modules may be cost effective in 125,000 new home installations per year (0.5 GW_p/yr). While this market is large enough to support multiple scaled up thin-film PV factories, inefficient energy pricing and demand-side market failures will inhibit prospective PV consumers without strong public policy support. Net metering rules, already implemented in many states to encourage PV market launch, represent a crude but reasonable surrogate for efficient electricity pricing mechanisms that may ultimately emerge to internalize the externality benefits of PV. These public benefits include reduced air pollution damages (estimated costs of damage to human health from fossil fuel power plants are presented in Appendix A), deferral of transmission and distribution capital expenditures, reduced exposure to fossil fuel price risks, and increased electricity system reliability for end users. Thus, net metering for PV ought to be implemented as broadly as possible and sustained until efficient pricing is in place. Complementary PV “buydowns” (e.g., a renewable portfolio standard with a specific PV requirement) are needed to jumpstart regional PV markets.     

Choice experiment study on the willingness to pay to improve electricity services

Modern forms of energy are an important vehicle towards poverty alleviation in rural areas of developing countries. Most developing countries’ households rely heavily on wood fuel which impacts on their health and socio-economic status. To ease such a dependency, other modern forms of energy, namely electricity, need to be provided. However, the quality of the electricity service, namely reliability, is an important factor in reducing this dependency. This paper discusses a choice experiment valuation study conducted among electrified rural households located in Kisumu, Kenya, in which the willingness to pay (WTP) to avoid power outages or blackouts was estimated. A mixed logit estimation was applied to identify the various socio-economic and demographic characteristics which determine preferences in reducing power outages among a household’s users. In conclusion, several of the socio-economic and demographic characteristics outlined in this paper were identified and can assist service differentiation to accommodate the diverse households’ preferences towards the improvement of the electricity service.     

Realistic generation cost of solar photovoltaic electricity

Solar photovoltaic (SPV) power plants have long working life with zero fuel cost and negligible maintenance cost but requires huge initial investment. The generation cost of the solar electricity is mainly the cost of financing the initial investment. Therefore, the generation cost of solar electricity in different years depends on the method of returning the loan. Currently levelized cost based on equated payment loan is being used. The static levelized generation cost of solar electricity is compared with the current value of variable generation cost of grid electricity. This improper cost comparison is inhibiting the growth of SPV electricity by creating wrong perception that solar electricity is very expensive. In this paper a new method of loan repayment has been developed resulting in generation cost of SPV electricity that increases with time like that of grid electricity. A generalized capital recovery factor has been developed for graduated payment loan in which capital and interest payment in each installment are calculated by treating each loan installment as an independent loan for the relevant years. Generalized results have been calculated which can be used to determine the cost of SPV electricity for a given system at different places. Results show that for SPV system with specific initial investment of 5.00 $/kWh/year, loan period of 30 years and loan interest rate of 4% the levelized generation cost of SPV electricity with equated payment loan turns out to be 28.92 ¢/kWh, while the corresponding generation cost with graduated payment loan with escalation in annual installment of 8% varies from 9.51 ¢/kWh in base year to 88.63 ¢/kWh in 30th year. So, in this case, the realistic current generation cost of SPV electricity is 9.51 ¢/kWh and not 28.92 ¢/kWh. Further, with graduated payment loan, extension in loan period results in sharp decline in cost of SPV electricity in base year. Hence, a policy change is required regarding the loan repayment method. It is proposed that to arrive at realistic cost of SPV electricity long-term graduated payment loans may be given for installing SPV power plants such that the escalation in annual loan installments be equal to the estimated inflation in the price of grid electricity with loan period close to working life of SPV system.     

Impacts of a United States’ biofuel policy on New Zealand's agricultural sector

The rise in oil prices has spurred interest in biofuels. Policies in the United States like the renewable fuel standard (RFS) have led to an expansion of ethanol production, while the New Zealand government has mandated a minimum level of biofuel sales.The research used a partial equilibrium model of international trade to quantify the price and farmgate income effects of the US RFS policy. The goal was to examine the competition between food and biofuel production and to quantify the impact of the policy on the agricultural sector in New Zealand.The RFS policy has a significant impact on corn prices, but a small effect on livestock prices and production. There thus appears to be little conflict between food and fuel uses for corn at the level of the RFS mandate. New Zealand's pasture-based livestock sector benefits from the use of corn for ethanol production: it receives better prices for its products, but does not face the same input cost increases as competitors. The results suggest that New Zealand faces an interesting decision: it could support investment in biofuels research, or benefit from the biofuels boom through the indirect impacts on demand and prices for meat and milk.     

Price,environment and security: Exploring multi-modal motivation in voluntary residential peak demand response

Peak demand on electricity grids is a growing problem that increases costs and risks to supply security. Residential sector loads often contribute significantly to seasonal and daily peak demand. Demand response projects aim to manage peak demand by applying price signals and automated load shedding technologies. This research investigates voluntary load shedding in response to information about the security of supply, the emission profile and the cost of meeting critical peak demand in the customers’ network. Customer willingness to change behaviour in response to this information was explored through mail-back survey. The diversified demand modelling method was used along with energy audit data to estimate the potential peak load reduction resulting from the voluntary demand response. A case study was conducted in a suburb of Christchurch, New Zealand, where electricity is the main source for water and space heating. On this network, all water heating cylinders have ripple-control technology and about 50% of the households subscribe to differential day/night pricing plan. The survey results show that the sensitivity to supply security is on par with price, with the emission sensitivity being slightly weaker. The modelling results show potential 10% reduction in critical peak load for aggregate voluntary demand response.     

Energy use of integral refrigerated containers in maritime transportation

The global trading of perishable goods is possible through the application of product refrigeration and atmospheric control during transportation. A mean energy consumption rate of 2.7 kW/TEU was assumed in this study, but was found to have potential variations of around ±60%. New Zealand’s maritime trade was considered as a case study for the year 2007 to place the effect of refrigerated transport in context. For individual refrigerated containers, approximately 19% of the energy use related to its journey is used for refrigeration purposes. In 2007, approximately 18% and 61% of New Zealand’s imported and exported food products by mass, respectively, required some form of refrigeration during transportation. Maintaining the refrigerated state of imports and exports to and from New Zealand during maritime transportation consumed approximately 280 GWh of electricity. Assuming all this electricity was generated onboard vessels using auxiliary engines, approximately 61 kt of fuel was consumed and 190 kt of CO₂ produced. Refrigeration is of particular importance to the many greenhouse gas or carbon footprinting studies conducted around the world. Implications are discussed in the context of greenhouse gas emissions from the transport of apples from NZ to the UK and long-term storage of UK apples.     

The forbidden fuel: Charcoal,urban woodfuel demand and supply dynamics,community forest management and woodfuel policy in Malawi

This article examines woodfuel policy challenges and opportunities in Malawi two decades after woodfuel-crisis narratives and counter-narratives. A nuanced examination of woodfuel supply, demand, use, and markets illuminated options to turn stagnant policies based on charcoal ‘bans’ and fuel-substitution into proactive, realistic ones acknowledging woodfuel dominance and its socio-economic importance. Findings revealed growing, spatially differentiated woodfuel deficits in southern and central Malawi and around Blantyre, Zomba and Lilongwe cities. Poverty, limited electricity access, reliability and generation exacerbated by tariff subsidies, and complex fuel-allocation decisions restricted energy-ladder transitions from woodfuels to electricity, producing an enduring urban-energy mix dominated by charcoal, thereby increasing wood consumption. Diverse socio-political interests prevented lifting of the charcoal ‘ban’ despite progressive forest laws. Despite implementation challenges, lessons already learnt, efficiency and poverty-reduction arguments, limited government capacity, growing illegal production of charcoal in forest reserves, and its staying power, make targeted community-based forest management (CBFM) approaches more practical for regulated, commercial production of woodfuels than the status quo. New differentiated policies should include commercial woodfuel production and licensing for revenue and ecological sustainability under CBFM or concessions within and outside selected reserves, an enterprise-based approaches for poverty reduction, smallholder/private tree-growing, woodfuel-energy conserving technologies, improved electricity supply and agricultural productivity.     

Metering of agricultural power supply in West Bengal,India: Who gains and who loses?

As a part of the ongoing power sector reforms in India, the state of West Bengal is in the process of metering agricultural electricity supply. This paper presents a first cut assessment of this initiative. Results suggest that the majority of the pump owners benefit from the reforms in two ways: first by having to pay a lower electricity bill for same usage and second through increased profit margins by selling water. This is because in response to the changed incentive structure, water prices rose sharply by 30–50% immediately after metering. In contrast, water buyers have lost out by having to pay higher water charges and face adverse terms of contract. Impact of metering on operation of groundwater markets and volume of groundwater extracted is less clear; they may expand, contract or remain unchanged, though water use efficiency is likely to go up. At current tariff rates, the electricity utilities are likely to earn less revenue than before. These findings are context specific and hold good for West Bengal where high flat tariff had fostered competitive groundwater markets and hence cannot be generalised for other Indian states.     

Forecasting electricity consumption in New Zealand using economic and demographic variables

The influence of selected economic and demographic variables on the annual electricity consumption in New Zealand has been investigated. The study uses gross domestic product, average price of electricity and population of New Zealand during the period 1965–1999. Models are developed using multiple linear regression analysis. It was found that the electricity consumption correlated effectively with all variables. Forecasts made using these models were compared with some available national forecasts. The forecasts are also compared with the forecasts of the previously developed Logistic model.     

高气价下联合循环机组建设类型探讨

本文对具有代表性发电工程造价和电价进行对比分析,燃气机组燃料费相比燃煤机组和核电机组占电价的比例处于较高水平,燃料价格变化对电价的影响较大.在高气价且价格又不稳定的情况下,新建哪种类型的联合循环机组才有竞争力,文中对几种类型的燃气联合循环机组进行探讨,并对天然气发电政策提出几点建议.     

System-level energy efficiency is the greatest barrier to development of the hydrogen economy

Current energy research investment policy in New Zealand is based on assumed benefits of transitioning to hydrogen as a transport fuel and as storage for electricity from renewable resources. The hydrogen economy concept, as set out in recent commissioned research investment policy advice documents, includes a range of hydrogen energy supply and consumption chains for transport and residential energy services. The benefits of research and development investments in these advice documents were not fully analyzed by cost or improvements in energy efficiency or green house gas emissions reduction. This paper sets out a straightforward method to quantify the system-level efficiency of these energy chains. The method was applied to transportation and stationary heat and power, with hydrogen generated from wind energy, natural gas and coal. The system-level efficiencies for the hydrogen chains were compared to direct use of conventionally generated electricity, and with internal combustion engines operating on gas- or coal-derived fuel. The hydrogen energy chains were shown to provide little or no system-level efficiency improvement over conventional technology. The current research investment policy is aimed at enabling a hydrogen economy without considering the dramatic loss of efficiency that would result from using this energy carrier.     

Policy schemes,operational strategies and system integration of residential co-generation fuel cells

This study presents a holistic approach for the commercialisation of fuel cells for stationary applications. We focus our analyses on microCHP based on SOFC units fired with natural gas. We analyse the interaction of operational strategies under different ownership arrangements, required support levels and system integration aspects. The operational strategies, support mechanisms and ownership arrangements have been identified through actor analysis involving experts from Denmark, France and Portugal. With regard to operational strategies, the actor analyses led us to distinguishing between a heat-driven strategy, with and without time-differentiated tariffs, and an electricity price driven strategy for the operation as a virtual power plant. The corresponding support schemes identified cover feed-in tariffs, net metering and feed-in premiums. Additionally, the interplay of the microCHP units with the national energy systems has been analysed. Our main findings are that net metering would be an appropriate tool to support FC based microCHP in Denmark, whereas a price premium would be the preferable tool in France and Portugal.     

Fuel cost uncertainty,capacity investment and price in a competitive electricity market

This paper studies the effect of natural-gas fuel cost uncertainty on capacity investment and price in a competitive electricity market. Our model has a two-stage decision process. In the first stage, an independent power producer (IPP) builds its optimal capacity, conditional on its perceived uncertainties in fuel cost and electricity demand. In the second stage, equilibrium prices and quantities are determined by IPPs competing in a Cournot market. Under the empirically reasonable assumption that per MWh fuel costs are log-normally distributed, we find that a profit-maximizing IPP increases its capacity in response to rising fuel cost volatility. Consequently, the expected profit of the IPP and expected consumer surplus increase with volatility, rejecting the hypothesis that rising fuel cost uncertainty tends to adversely affect producers and consumers. Expected consumer surplus further increases if the IPP hedges the fuel cost risk. However, the IPP's optimal strategy is not to do so. The policy implication of these results is that the government should not intervene to reduce the price volatility of a well-functioning spot market for natural gas, chiefly because such intervention can have the unintended consequence of discouraging generation investment, raising electricity prices, and harming consumers.