Is Real-time Pricing Smart for Consumers?

Anette Boom, Sebastian Schwenen

Publikation: Working paperForskning

195 Downloads (Pure)


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.
UdgiverDepartment of Economics. Copenhagen Business School
Antal sider26
StatusUdgivet - 2020
NavnWorking Paper / Department of Economics. Copenhagen Business School


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