Contractual Incentives -consumer demand response on the Swedish electricity market

Sammanfattning: Variable electricity rate is endorsed as the most efficient way to evoke consumer demand response, yet actual experience is limited and research within this area is thinly documented. This paper examines consumer demand response on a daily basis based on a unique dataset of hourly consumption data and electricity area prices during one year. This has been done by an OLS - regression where the dependent variable has been defined as a quotient between consumption for households with variable and fixed electricity contracts. Contrary to what the basic theory of supply and demand suggests the results do not support that electricity rate should have a significant explanatory effect on changes in relative daily consumption of electricity.