Cost-reflective electricity pricing: Consumer preferences and perceptions |
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| Affiliation: | 1. Commonwealth Scientific and Industrial Research Organisation (CSIRO), 1 Technology Ct, Pullenvale QLD 4069, Australia;2. Formerly Commonwealth Scientific and Industrial Research Organisation (CSIRO), 10 Murray Dwyer Circuit, Mayfield West NSW 2304, Australia;1. Faculty of Environmental Engineering, The University of Kitakyushu 1-1, Hibikino, Wakamatsu-ku, Kitakyushu, Fukuoka 808-0135, Japan;2. Maxvalu Kyushu Co., Ltd. 3-13-21, Hakataeki-Higashi, Hakata-ku, Fukuoka 812-0013, Japan;3. Faculty of Economics and Business Administration, The University of Kitakyushu 4-2-1, Kitagata, Kokura-minami-ku, Kitakyushu, Fukuoka 802-8577, Japan;4. NS Solutions Corporation 2-27-1, Shinkawa, Chuo-ku, Tokyo 104-0033, Japan;5. IBM Japan, Ltd.3-26-29, Hakataekimae, Hakata-ku, Fukuoka 812-0011, Japan;6. NS Solutions Corporation 2-27-1, Shinkawa, Chuo-ku, Tokyo 104-0033, Japan;1. Department of Mechanical and Aerospace Engineering and Center for Automotive Research (CAR), The Ohio State University, Columbus, OH 43212, USA;2. The John Glenn School of Public Affairs and Center for Automotive Research (CAR), The Ohio State University, Columbus, OH 43212, USA;1. Institute of Psychology, Otto-von-Guericke-University Magdeburg, Universitätsplatz 2, 39106 Magdeburg, Germany;2. Center for Interdisciplinary Risk and Innovation Studies (ZIRIUS), University of Stuttgart, Seidenstr. 36, 70174 Stuttgart, Germany;1. Department of Environment, ESAC-Polytechnic Institute of Coimbra, 3045-601 Coimbra, Portugal;2. INESC Coimbra, Rua Antero de Quental 199, 3000-033 Coimbra, Portugal;3. Department of Electrical and Computer Engineering, University of Coimbra, 3030-290 Coimbra, Portugal;4. Environmental Change Institute, University of Oxford, South Parks Road, Oxford OX1 3QY, UK;5. Centre for Social Studies, University of Coimbra, 3000-995 Coimbra, Portugal;6. Department of Mechanical Engineering, University of Aveiro, Campus de Santiago, 3810-193 Aveiro, Portugal;1. Science Policy Research Unit, University of Sussex, Jubilee Building, Falmer, Brighton, BN1 9SL, United Kingdom;2. Centre for Environmental Policy, Imperial College London, Weeks Building, 16 – 18, Prince’s Gardens, South Kensington, London, SW7 1NE, United Kingdom |
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| Abstract: | In Australia, residential electricity peak demand has risen steeply in recent decades, leading to higher prices as new infrastructure was needed to satisfy demand. One way of limiting further infrastructure-induced retail price rises is via ‘cost-reflective’ electricity network pricing that incentivises users to shift their demand to non-peak periods. Empowering consumers with knowledge of their energy usage is critical to maximise the potential benefits of cost-reflective pricing. This research consulted residential electricity consumers in three Australian states on their perceptions and acceptance of two cost-reflective pricing scenarios (Time-of-Use and Peak Capacity pricing) and associated technologies to support such pricing (smart meters, in-home displays and direct load control devices). An energy economist presented information to focus groups on the merits and limitations of each scenario, and participants’ views were captured. Almost half of the 53 participants were agreeable to Time-of-Use pricing, but did not have a clear preference for Peak Capacity pricing, where the price was based on the daily maximum demand. Participants recommended further information to both understand and justify the potential benefits, and for technologies to be introduced to enhance the pricing options. The results have implications for utilities and providers who seek to reduce peak demand. |
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| Keywords: | Cost-reflective pricing Flexible pricing Residential Time-of-Use Societal acceptance Smart meters |
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