Variable Power Tariffs Exacerbate Social Inequalities?

This data-file tabulates the impacts of variable electricity tariffs, after switching 4.622 households over from fixed electricity tariffs, across a large-scale sample in the United States. This theme is increasingly important as intermittent renewables reach in developed world power grids (note here).

Residential electricity demand is inelastic, with a 20% price-increase yielding a mere 1% reduction in end-demand. Peakload demand fell by 4%.

However, socially “vulnerable” consumers suffered disproportionately, only achieving a 2% decrease in peakload demand. Hence, while monthly power prices rose by 18% for non-vulnerable consumers, they rose by 22% for vulnerable consumers. The results, data and study are in the data-file.

We do think that power grids will increasingly need to offer economic incentives for demand shifting, amidst increasing deployment of renewables. However based on past studies, they may need to tread carefully.

Copyright: Thunder Said Energy, 2019-2023.