Assessment of residential electricity tariff switching based on customer response elasticity

Abstract

Price-based demand response programs have recently become focus of interest due to the increased flexibility and potential to deliver greater demand responsiveness. However, the key to success of such programs highly depends on greater participation of residential customers through defining more effective dynamic tariffs. This paper aims to assess and predict the probability of switching between different tariffs based on the price response elasticity of residential customers. In this regard, different types of dynamic tariffs have been considered in contrast with a fixed price tariff. In order to investigate the variability and flexibility of household energy usage due to temporal and individual characteristics of each household, the following pricing bands are considered: day, peak, night and weekend/weekday. Moreover, the elasticity of demand relating to different pricing bands has been determined for different groups of residential customers.