Electricity demand: behavioural and policy interventions

Good talk/ discussion today put on by the EU Centre at UniMelb & FBE.

Jorg Lingens: electricity demand behavioural and policy interventions.

What determines household electricity demand?

Options: storage vs demand side mechanisms.  Demand side less expensive and can stabilise system.

  1. Real time pricing.  So houses and SMEs adjust consumption.  But price response is typically v small. Also rich households tend to have higher price responsiveness hence burden on poor.  NOTE: in Germany, where Jorg based his research, most households seem to pay fixed annual prices for electricity.  So determinants of demand are going to be v different from Australia.
  2. Soft interventions: social norms, information provision, psych effects – this is area of Jorg’s research.  Set energy saving goals with no monetary impact if not reached.  Households tend to be present biased … options include paying for elect at time of consumption (not great) or using goal as commitment device.  This reduced cons by approx 4%.  They are doing research now with retailer to trial… with both control and treatment groups.

David Blowers from Grattan.  Progress on (time and demand based) pricing in Victoria is awfully slow.  Only 0.3% of vic households using price profiles….

Getting engagement from consumers in demand response is really hard.  Maybe consider airline pricing and frequent flyer examples, eg do well and get points towards free energy efficient appliances … or gamify.

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