Residential winter kW h responsiveness under optional time-varying pricing in British Columbia

C. K. Woo, Raymond Li, A. Shiu, I. Horowitz

Research output: Contribution to journalArticle

31 Citations (Scopus)

Abstract

A large sample of daily electricity consumption and pricing data are available from a pilot study conducted by BC Hydro in British Columbia (Canada) of its residential customers under optional time-varying pricing and remotely-activated load-control devices for the four winter months of November 2007–February 2008. We use those data to estimate the elasticity of substitution σ, defined as the negative of the percentage change in the peak-to-off-peak kW h ratio due to a 1% change in the peak-to-off-peak price ratio. Our estimates of σ characterize residential price responsiveness with and without load control during cold-weather months. While the estimates of σ sans load control are highly statistically significant (α = 0.01), they are less than 0.07. With load control in place, however, these σ estimates more than triple. Finally, we show that time-varying pricing sans load control causes a peak kW h reduction of 2.6% at the 2:1 peak-to-off-peak price ratio to 9.2% at the 12:1 peak-to-off-peak price ratio. Load control raises these reduction estimates to 9.2% and 30.7%.
Original languageEnglish
Pages (from-to)288-297
Number of pages10
JournalApplied Energy
Volume108
DOIs
Publication statusPublished - Aug 2013
Externally publishedYes

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winter
Costs
Elasticity
Substitution reactions
Electricity
elasticity
substitution
weather
price
cold
electricity consumption

Cite this

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title = "Residential winter kW h responsiveness under optional time-varying pricing in British Columbia",
abstract = "A large sample of daily electricity consumption and pricing data are available from a pilot study conducted by BC Hydro in British Columbia (Canada) of its residential customers under optional time-varying pricing and remotely-activated load-control devices for the four winter months of November 2007–February 2008. We use those data to estimate the elasticity of substitution σ, defined as the negative of the percentage change in the peak-to-off-peak kW h ratio due to a 1{\%} change in the peak-to-off-peak price ratio. Our estimates of σ characterize residential price responsiveness with and without load control during cold-weather months. While the estimates of σ sans load control are highly statistically significant (α = 0.01), they are less than 0.07. With load control in place, however, these σ estimates more than triple. Finally, we show that time-varying pricing sans load control causes a peak kW h reduction of 2.6{\%} at the 2:1 peak-to-off-peak price ratio to 9.2{\%} at the 12:1 peak-to-off-peak price ratio. Load control raises these reduction estimates to 9.2{\%} and 30.7{\%}.",
keywords = "Residential price responsiveness, Winter peak kW h reduction, Optional time-varying pricing, British Columbia",
author = "Woo, {C. K.} and Raymond Li and A. Shiu and I. Horowitz",
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language = "English",
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Residential winter kW h responsiveness under optional time-varying pricing in British Columbia. / Woo, C. K.; Li, Raymond; Shiu, A.; Horowitz, I.

In: Applied Energy, Vol. 108, 08.2013, p. 288-297.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Residential winter kW h responsiveness under optional time-varying pricing in British Columbia

AU - Woo, C. K.

AU - Li, Raymond

AU - Shiu, A.

AU - Horowitz, I.

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N2 - A large sample of daily electricity consumption and pricing data are available from a pilot study conducted by BC Hydro in British Columbia (Canada) of its residential customers under optional time-varying pricing and remotely-activated load-control devices for the four winter months of November 2007–February 2008. We use those data to estimate the elasticity of substitution σ, defined as the negative of the percentage change in the peak-to-off-peak kW h ratio due to a 1% change in the peak-to-off-peak price ratio. Our estimates of σ characterize residential price responsiveness with and without load control during cold-weather months. While the estimates of σ sans load control are highly statistically significant (α = 0.01), they are less than 0.07. With load control in place, however, these σ estimates more than triple. Finally, we show that time-varying pricing sans load control causes a peak kW h reduction of 2.6% at the 2:1 peak-to-off-peak price ratio to 9.2% at the 12:1 peak-to-off-peak price ratio. Load control raises these reduction estimates to 9.2% and 30.7%.

AB - A large sample of daily electricity consumption and pricing data are available from a pilot study conducted by BC Hydro in British Columbia (Canada) of its residential customers under optional time-varying pricing and remotely-activated load-control devices for the four winter months of November 2007–February 2008. We use those data to estimate the elasticity of substitution σ, defined as the negative of the percentage change in the peak-to-off-peak kW h ratio due to a 1% change in the peak-to-off-peak price ratio. Our estimates of σ characterize residential price responsiveness with and without load control during cold-weather months. While the estimates of σ sans load control are highly statistically significant (α = 0.01), they are less than 0.07. With load control in place, however, these σ estimates more than triple. Finally, we show that time-varying pricing sans load control causes a peak kW h reduction of 2.6% at the 2:1 peak-to-off-peak price ratio to 9.2% at the 12:1 peak-to-off-peak price ratio. Load control raises these reduction estimates to 9.2% and 30.7%.

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KW - Optional time-varying pricing

KW - British Columbia

U2 - 10.1016/j.apenergy.2013.03.042

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