BeSmart

Smart-metering and dynamic electricity tariffing: Energy consumption choices, regulatory policies and welfare effects (BeSmart)

Duration: November 2018 until October 2021 

Project coordination: University of Kassel, Chair of Energy Economics 

Cooperation partners: Other chairs of the University of Kassel (Empirical Economic Research and Foundations of Law, Private Law and Economics of Law), Potsdam Institute for Climate Impact Research (PIK)

Funding institution: Federal Ministry of Education and Research (BMBF), second phase of the funding priority "Economics of Climate Change" ("Ökonomie des Klimawandels")

Summary: Dynamic electricity pricing and smart-grids are key elements of the vital transformation towards a decarbonized power production. Integrating volatile produced renewable electricity at large-scale will require electricity users, who adapt their consumption to the available electricity supply, particularly if energy sectors are coupled. This consumption adjustment can be achieved via price signals. Economists have long been in favor of dynamic pricing, while it has been rarely implemented so far. Although recent technological progress has made it economically and technologically feasible, consumers’ acceptance remains a crucial barrier to a widespread implementation.

The objective of this project is to develop economic and legal solutions to raise the social acceptance of dynamic pricing schemes and thereby to unlock the potential of demand-side flexibility in wind and solar power dominated energy systems. Against this background, this project aims to provide practical advice to regulators, utilities and retail firms in addressing consumers’ acceptance of dynamic tariffs.

Contact: Elke D. Groh (elke.groh@uni-kassel.de), Ipek Eraydin (ipek.eraydin@uni-kassel.de)