Designing Pareto-superior demand-response rate options

I. HOROWITZ, Chi Keung WOO

Research output: Contribution to journalArticle

32 Citations (Scopus)

Abstract

We explore three voluntary service options - real-time pricing, time-of-use pricing, and curtailable/interruptible service - that a local distribution company might offer its customers in order to encourage them to alter their electricity usage in response to changes in the electricity-spot-market price. These options are simple and practical, and make minimal information demands. We show that each of the options is Pareto-superior ex ante, in that it benefits both the participants and the company offering it, while not affecting the non-participants. The options are shown to be Pareto-superior ex post as well, except under certain exceptional circumstances. Copyright © 2005 Elsevier Ltd. All rights reserved.
Original languageEnglish
Pages (from-to)1040-1051
JournalEnergy
Volume31
Issue number6-7
DOIs
Publication statusPublished - May 2006

Citation

Horowitz, I., & Woo, C. K. (2006). Designing Pareto-superior demand-response rate options. Energy, 31(6-7), 1040-1051. doi: 10.1016/j.energy.2005.02.013

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