Wind and solar energy are supplying an increasing share of electricity in many jurisdictions, but the availability of these resources can change dramatically across hours of the day. This potential for significant unpredictable positive and negative supply and demand imbalances substantially changes the role of active demand-side participation. We report results from a large field experiment that with a few hours prior notice provided Danish residential consumers with dynamic price and information signals aimed at causing them to shift their consumption either into certain hours of the day or away from other hours of the day. The experiment yields the surprising result that the same price signal produces a two to three times larger in absolute value consumption shifts into target hours relative consumption shifts away from target hours. The experiment also finds that these incentives to shift consumption into a set of target hours causes reduced consumption in the hours of the day that surround these target hours. The same qualitative results hold for purely informational signals: (1) the shift-into results are significantly larger in absolute value than the shift-away of results and (2) there is stronger evidence that shifting consumption into a time period reduces consumption in the surrounding periods than there is that shifting consumption out of a time period increasing consumption in the surrounding time periods.
Past Faculty Workshop•Apr 18, 2017
Frank Wolak, Stanford University
Shifting Electricity Demand “Into” versus “Away” from Hours of the Day Using Real-time Electricity Pricing and Information Provision: Experimental Evidence from Denmark