Is Real-time Pricing Smart for Consumers?

Anette Boom, Sebastian Schwenen

Publikation: Working paperForskning

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Abstrakt

We examine the effects of real-time pricing on welfare and consumer surplus in electricity markets. We model consumers on real-time pricing who purchase electricity on the wholesale market. A second group of consumers contracts with retailers and pays time-invariant retail prices. Electricity generating firms compete in supply functions. Increasing the number of consumers on real-time pricing increases welfare and consumer surplus of both types of consumers. Yet, risk averse consumers on traditional time-invariant retail prices are always better off. Collectively, our results point to a public good nature of demand response in power markets when consumers are risk-averse.
OriginalsprogEngelsk
UdgivelsesstedFrederiksberg
UdgiverDepartment of Economics. Copenhagen Business School
Antal sider26
StatusUdgivet - 2020
NavnWorking Paper / Department of Economics. Copenhagen Business School
Nummer12-2020

Emneord

  • Market integration
  • Electricity
  • Renewable
  • Energy policy
  • Volatility

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