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Sustainability 2016, 8(9), 929; doi:10.3390/su8090929

Fostering Residential Demand Response through Dynamic Pricing Schemes: A Behavioural Review of Smart Grid Pilots in Europe

1
VITO (Vlaamse Instelling voor Technologisch Onderzoek)/Energyville, Boeretang 200, 2400 Mol, Belgium
2
ECN (Energieonderzoek Centrum Nederland), Westerduinweg 3, 1755 ZG Petten, The Netherlands
3
BAUM Consult GmbH, Gotzinger Straße 48/50, 81371 München, Germany
4
RSE SpA, Via Rubattino 54, 20134 Milan, Italy
*
Author to whom correspondence should be addressed.
Received: 15 July 2016 / Accepted: 7 September 2016 / Published: 11 September 2016
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Abstract

Many smart grid projects make use of dynamic pricing schemes aimed to motivate consumers to shift and/or decrease energy use. Based upon existing literature and analyses of current smart grid projects, this survey paper presents key lessons on how to encourage households to adjust energy end use by means of dynamic tariffs. The paper identifies four key hypotheses related to fostering demand response through dynamic tariff schemes and examines whether these hypotheses can be accepted or rejected based on a review of published findings from a range of European pilot projects. We conclude that dynamic pricing schemes have the power to adjust energy consumption behavior within households. In order to work effectively, the dynamic tariff should be simple to understand for the end users, with timely notifications of price changes, a considerable effect on their energy bill and, if the tariff is more complex, the burden for the consumer could be eased by introducing automated control. Although sometimes the mere introduction of a dynamic tariff has proven to be effective, often the success of the pricing scheme depends also on other factors influencing the behavior of end users. An important condition to make dynamic tariffs work is that the end users should be engaged with them. View Full-Text
Keywords: dynamic pricing; demand response; smart grid; consumer engagement dynamic pricing; demand response; smart grid; consumer engagement
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MDPI and ACS Style

Kessels, K.; Kraan, C.; Karg, L.; Maggiore, S.; Valkering, P.; Laes, E. Fostering Residential Demand Response through Dynamic Pricing Schemes: A Behavioural Review of Smart Grid Pilots in Europe. Sustainability 2016, 8, 929.

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