Scandinavian Working Papers in Economics

Umeå Economic Studies,
Umeå University, Department of Economics

No 903: Residential End use electricity demand and the implications for real time pricing in Sweden

Mattias Vesterberg () and Chandra Kiran B. Krishnamurthy ()
Additional contact information
Mattias Vesterberg: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Chandra Kiran B. Krishnamurthy: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden

Abstract: Using a unique and highly detailed data set on energy consumption at the appliance-level for 200 Swedish households, seemingly unrelated regression (SUR)-based end-use specific load curves are estimated. The estimated load curves are then used to explore possible restrictions on load shifting (e.g. the office hours schedule) as well as the cost implications of different load shift patterns. The cost implications of shifting load from “expensive” to “cheap” hours, using the Nord pool spot prices as a proxy for a dynamic price, are computed to be very small; roughly 2-5% reduction in total daily cost from shifting load up to seven hours ahead, indicating small incentives for households (and retailers) to adopt dynamic pricing of electricity. Our results have important implications for Swedish energy policy, in particular for the Swedish government’s stated goal of real-time pricing.

Keywords: Direct Metering; Residential Electricity Demand; Real time electricity pricing

JEL-codes: C30; D12; Q41; Q48

33 pages, First version: December 9, 2014. Revised: April 15, 2015.

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