Economic Impact of Dynamic Electricity Pricing Mechanisms Adoption fo rHouseholds in Sweden

• Global smart metering market growth has increased significantly over the past few years and the trend is expected to continue. Smart metering technology enables energy consumption feedback and the adoption of dynamic pricing mechanisms that encourages users to shift power consumption from peak-use times to lower-use times, in order to help balance the load in the power system. In Sweden particularly, the introduction of the new legislation and adoption of remote meters in 2009, in combination with more flexible pricing schemes, offer a great opportunity for users to reduce energy consumption during peak times, increase their energy efficiency and therefore reduce their overall cost. More recently, in 2012, Swedish energy providers started offering hourly spot-based electricity price to homeowners in order give them access to pricing mechanisms that are closer to the real cost of electricity supply. Additionally to hourly pricing, other dynamic pricing contracts are available for consumers all across the country; however, conventional agreements that use fixed-rates for electricity are still the most common. This paper analyzes the economic impact for consumers, if dynamic pricing, enabled through smart metering technologies, is adopted. To achieve this, electricity costs from a large group of households were calculated, using users’ hourly consumption data with both conventional fixed rates and real time pricing, in order to understand their impact on customers’ bills. Obtained results suggest that real time pricing has great savings potential, especially for years where summer rainfall and winter conditions are within average. However, in order to increase savings and have them consistent year after year, changes in user time-of-use consumption profile are required. Moreover, this research work leads to further analysis on dynamic pricing combined with demand response in order to optimize electricity costs.

Subject headings

TEKNIK OCH TEKNOLOGIER  -- Elektroteknik och elektronik -- Annan elektroteknik och elektronik (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Electrical Engineering, Electronic Engineering, Information Engineering -- Other Electrical Engineering, Electronic Engineering, Information Engineering (hsv//eng)

Keyword

Smart Metering

Dynamic Pricing

Electricity Market

Nordpool

Electrical Grid

Energy- and Environmental Engineering

energi- och miljöteknik

Publication and Content Type

ref (subject category)

kon (subject category)