Is Real-time Pricing Smart for Consumers?

Anette Boom*, Sebastian Schwenen

*Corresponding author for this work

Research output: Contribution to conferencePaperResearchpeer-review


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 timeinvariant 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.
Original languageEnglish
Publication date2021
Number of pages31
Publication statusPublished - 2021
Event9th Mannheim Conference on Energy and the Environment - Online, WWW
Duration: 20 May 202121 May 2021
Conference number: 9


Conference9th Mannheim Conference on Energy and the Environment


  • Electricity
  • Real-time pricing
  • Market power
  • Efficiency

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