Consumers’ Preferences on Demand Response in Dutch Households. A Stated choice experiment in the residential energy market.
Last Updated: 5-2017
The energy transition is causing a shift from fossil fuels towards more unpredictable renewable resources like wind and solar energy. Due to this flexibilization of the supply side of the energy market, the demand side should be more flexible as well. This is needed to level the electricity grid. Therefore, demand flexibilization is researched by looking at energy consumers’ behaviour and preferences for demand response programs. With a 190 respondent choice experiment, the preferences in demand response programs are tested among Dutch households. Using the Multinomial logit methodology, the relative importance of the attributes and their levels which are found in literature are identified. Subsequently, the heterogeneity of the model is determined using a mixed logit model and the nature of this heterogeneity is determined with a latent class model. Six different attributes with each three levels are tested in this research, namely: financial reward, limiting comfort of electric vehicles, comfort in household heating and in household applications, price of an automation system and contract length. It seems that in general, contract length is the most important attribute. Due to the heterogeneity of the model, for young male people (26-35) with low incomes (€40.000) and renters, a three year dedication is less disturbing. Nevertheless, a limit on household applications has a negative influence on decision making for this target group. The barrier of cost seems to be twice as high relative to the benefits of a financial reward, meaning that barriers in these programs seem to be more relevant than rewards. First step would therefore be to take away barriers before benefits are harvested.