The effect of low-carbon technology diffusion on the adoption of electricity tariffs for demand response - Christine Gschwendtner ...
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The effect of low-carbon technology diffusion on the adoption of electricity tariffs for demand response Christine Gschwendtner cgschwendtner@ethz.ch, @GschwendtnerCh IAEE Conference, June 2021
Low-carbon technologies can be part of both the challenge and the
solution
Challenge for electricity system Solution as flexibility provider
Intermittent Renewables Demand Response
Transmission
System
Operator
Electrification
Distribution
System
Operator
Gschwendtner, C., IAEE Conference June 2021 2It is not clear which tariff design leads to the highest peak reductions
Trials of time-varying tariffs
50
45
Peak load reduction in %
40
35
30
Critical peak pricing
25
Time-of-use tariff
20 Real-time pricing
15 Time-of-use tariff with critical peak pricing
10
5
0
0 2 4 6 8 10 12 14
Peak to off-peak price ratio in %
Gschwendtner, C., IAEE Conference June 2021 3Combining economic, social, and technical aspects enables a holistic
approach
Economics
Technical Social
requirements Aspects
Gschwendtner, C., IAEE Conference June 2021 4What are the potentials and barriers for flexibility provision of different
low-carbon technologies in households?
Research Question 3:
Research Question 1:
How do different stakeholders perceive
How do low-carbon technologies
demand response with
affect household demand load?
different incentives and why?
Research Question 4:
How does the diffusion of low-carbon
Research Question 2:
technologies affect the adoption of different
What is the technical flexibility
tariffs with different automation levels?
potential of the new loads?
Gschwendtner, C., IAEE Conference June 2021 5A mixed-methods approach supports the integration of different
perspectives
Actors in the electricity system
15 Interviews:
• Electricity retailer (3)
• Electricity service provider (1) Research Question 3:
• Municipal utility (2) How do different stakeholders perceive
• Distribution grid operators (6) demand response with
• Transmission grid operators (1) different incentives and why?
• Academia (1)
• NGO (1)
Households Research Question 4:
Survey How does the diffusion of low-carbon
• Heat pump owners technologies affect the adoption of different
• Electric vehicles owners tariffs with different automation levels?
• Photovoltaic installations
• Storage technologies
• None of the above
Gschwendtner, C., IAEE Conference June 2021 6More complicated time-varying tariffs might neither be attractive for
households nor for the electricity system
“It is questionable if time-varying tariffs are the right instrument to achieve this” (DNO)
Potential for
• Networks might need to be reinforced anyways
electricity • Geographical differences based on demand and renewable energy supply
system • Reliability issue: DNOs prefer direct load control
“Households will not put in any effort for the small benefit they can get” (DNO)
Role of • Adaptation of behaviour cannot be expected
households • Planning insecurities, particularly regarding electric vehicles
• No concerns about low diversity factor
• Smart meter rollout as pre-condition
• Social inequality
Barriers for • Limited incentives for DNOs: operational costs increase with smart solutions and conventional
implementation network reinforcement is supported by the government
• Regulatory changes required
• Billing process complicated for small DNOs
Gschwendtner, C., IAEE Conference June 2021 7Different combinations of automation levels and tariff types
Electricity saving tariff High-load tariff
Watt
Automation levels €
High pricing zone
Manual
Low pricing zone
or fixed rate
Consumption in kWh Daytime
Semi-automatic
Time-of-use tariff (static + dynamic) Real-time pricing
Watt €/kWh Watt €/kWh
Automatic with
exception
Automatic
Daytime Daytime
Gschwendtner, C., IAEE Conference June 2021 8Sample characteristics
280 responses; full-time employed men with a university degree and an own house are dominant in the
sample
Age Household size
Switch tariff within 2 years Smart meter tested
Gschwendtner, C., IAEE Conference June 2021 9Low-carbon technology diffusion in the sample
Technology diffusion in households
Heat pump; 45; 16%
None ; 74; 26%
Technology diffusion
PV, heat pump; 33; 12%
46% Heat pumps
29% Electric vehicles
PV, storage, EV ; 15; 5% EV, heat pump; 8; 3%
Storage, heat pump; 1; 0%
EV, storage; 1; 0%
PV, storage; 9; 3% PV, EV, heat pump; 9; 3%
Storage ; 4; 2% PV, storage, heat pump; 19; 7%
PV, EV ; 18; 7%
PV, storage, EV, heat pump; 14; 5%
EV; 16; 6%
PV; 14; 5%
Gschwendtner, C., IAEE Conference June 2021 10The effect of low-carbon technology diffusion on tariff selection
HP&EV
EV I would not switch.
Real-time
Dynamic
HP Static
High-load
Electricity Saving
None
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Percentage share of people with specific technology choosing a specific tariff
Gschwendtner, C., IAEE Conference June 2021 11Attractiveness of combinations of tariffs with automation levels
RealTimeAutomatic
RealTimeExceptions
RealTimeSemiautomatic
RealTimeManual
DynamicAutomatic
DynamicExceptions
DynamicSemiautomatic
DynamicManual
StaticAutomatic
StaticExceptions
StaticSemiautomatic
StaticManual
HighLoadAutomatic
HighLoadExceptions
HighLoadSemiautomatic
HighLoadManual
0 1 2 3 4 5 6 7
Likert Scale from totally unattractive (0) to totally attractive (7)
Gschwendtner, C., IAEE Conference June 2021 12Most important decision criteria for tariff selection
No changes in everyday activities required
Role-model for others
Desired degree of automation possible
Desired amount of electricity available at any time
No initial investment required
HP&EV
No additional time effort required
EV
Desired comfort available at any time HP
Attributes of the tariff do not change during the day None
Tariff is simple to understand
Saving money
Climate-friendly
0% 10% 20% 30% 40% 50% 60% 70%
Percentage share of people with specific technology
Gschwendtner, C., IAEE Conference June 2021 13“Technology” is the most significant influencing factor for tariff selection
None of the technologies
• Choose the electricity saving tariff
Significant influencing factors of tariff choice significantly more often
• Do significantly more often not switch to any
of the offered tariffs
Technology
PV
• Choose dynamic time-of-use tariff
significantly more often
Current tariff
PV and EVs
• Choose real-time pricing tariff significantly
Preferred price difference more often
PV, storage, and EVs
• Choose dynamic time-of-use tariff
significantly more often
Gschwendtner, C., IAEE Conference June 2021 14“Current tariff” significantly affects tariff selection
Significant influencing factors of tariff choice
Green electricity tariff
• Choose static time-of-use tariff significantly
Technology
more often
Basic supply tariff
Current tariff • Choose high-load tariff significantly more
often
Heat pump tariff
Preferred price difference
• Significantly less likely to switch to any of
the tariffs
Gschwendtner, C., IAEE Conference June 2021 15Risk-averse people are less likely to select time-varying tariffs
Significant influencing factors of tariff choice
Technology
Current tariff Higher price difference between periods
• Three times as likely to choose a time-varying
tariff
Preferred price difference
• Risk-averse people are less likely to find time-
varying tariffs attractive
Gschwendtner, C., IAEE Conference June 2021 16Key take-aways
❖ Reliability issue: DNOs prefer direct load control
Electricity system ❖ Geographical differences based on demand and renewable energy supply
❖ Regulatory changes might be required to incentivize smart solutions
❖ Saving money and positive climate impact are main reasons for choosing a specific tariff
❖ PVs, EVs and storage are the determining technologies for choosing time-varying tariffs rather
Households’ tariff than heat pumps
selection ❖ Electricity saving and high-load tariff are likely to be more attractive to people not owning low-
carbon technologies and currently using a basic supply tariff (if they switch at all)
❖ Risk-averse people are less likely to find time-varying tariffs attractive
❖ While automation is welcomed, the ability to use an override option is desired
❖ Direct load control might be best option for system as well as households, particularly for heat
pumps
Implications ❖ Simple tariffs might be enough for the system and preferred by households
❖ Further research: use of override option
❖ Future supply and demand of flexibility at both transmission and distribution level
❖ Different options for flexibility procurement: competing or complementary?
Gschwendtner, C., IAEE Conference June 2021 17Thank you for
your attention Christine Gschwendtner
PhD Candidate
and I am looking cgschwendtner@ethz.ch
@GschwendtnerCh
forward to the
discussion!
Gschwendtner, C., IAEE Conference June 2021 18You can also read
