Short-term consumer benefits of dynamic pricing

Abstract

Consumer benefits of dynamic pricing depend on a variety of factors. Consumer characteristics and climatic circumstances widely differ, which forces a regional comparison. This paper presents a general overview of demand response programs and focuses on the short-term benefits of dynamic pricing for an average Flemish residential consumer. It reaches a methodology to develop a cost reflective dynamic pricing program and to estimate short-term bill savings. Participating in a dynamic pricing program saves an average consumer 2.32 percent of his initial bill. While this result seems insufficient to justify implementation, it contains only a small proportion of a series of dynamic pricing benefits.