Conference Agenda

I study consumers' choices in the retail electricity market. By conducting a large-scale survey experiment with 3% of the Danish working-age population, I have gathered data on respondents' factual knowledge of the retail electricity market, their beliefs, preferences, and intentions to switch providers. Crucially, I can link their intentions with actual switching behaviors using nationwide smart meter data. My findings reveal a substantial gap between switching intentions and actions. This gap is exacerbated by my experimental interventions which 1) provide information about savings and switching costs and 2) decrease switching costs by offering free access to a switching service. While my interventions have large and significant effects on switching intention, they have only minor effects on actual switching behaviors. I calculate that a majority of consumers leaves money on the table by not switching. The low switching rates cannot be explained by biased beliefs or high switching costs. Demographics do not explain switching behavior, however, personality traits such as risk aversion, trust, and a tendency to avoid procrastination matter. The observed intention action gap can be explained by present-biased individuals who procrastinate and quickly forget to switch. Based on these findings, I suggest that simply drawing attention to information or educating consumers is unlikely to stimulate market activity. I recommend for policymakers to consider implementing smart defaults, for which I find strong citizen support in my research.

Dynamic electricity prices expose households to the risk of extremely high electricity bills during scarcity events. To protect households from high scarcity prices, I explore how to combine dynamic electricity prices with forward hedging. I derive household-specific optimal forward hedge shares by applying a utility maximization model to 2,159 UK households exposed to dynamic prices. The average optimal hedge share is 59% of households’ baseline consumption. Hedge shares are higher for electric heating and electric vehicle owners and lower for solar PV and battery storage owners. My key theoretical finding is that an increase in households’ price elasticity of demand raises optimal hedge shares if households face positive correlation between electricity prices and their weather-related desire to consume electricity. Forward hedging effectively reduces electricity bill volatility by 18% for price-inelastic households. When exposing households to scarcity events, hedging achieves sizable welfare gains equivalent to 19% reduction in average electricity prices.

To minimize the environmental impact of electric vehicles (EVs) and support decarbonizing electric grids, drivers must charge their EVs when renewable energy generation is abundant. To induce a shift in charging behavior toward daylight hours with abundant solar energy, we conducted a field experiment (n = 629) at a large university campus to measure the influence of informational and financial incentives on the usage and timing of workplace charging. While neither intervention affected total charging, they induced opposite temporal shifts. Receiving information about the climate benefits of daytime charging induced a transition from early to later morning, whereas receiving larger financial incentives to charge on campus prompted a shift from daytime to overnight and early morning charging. We identify high network utilization as a possible mechanism that causes increased competition for chargers and earlier arrival times during the financial discount period. The results show substantial heterogeneity among subgroups in temporal shifts, with those having high flexibility to change daily schedules (e.g., students, residents) primarily shifting the timing of their charging. Our findings highlight the importance of informational nudges, network capacity, and driver demographics for crafting sustainable charging policies.

To overcome the inherent clash between the ever-increasing push for electrification in the transportation and heating sectors, and the intermittent nature of renewable energy sources, demand response solutions such as direct load control (DLC) tariffs are receiving growing attention from researchers and policymakers. The present study aims to investigate the impact of two measures (i.e. a video intervention and an upfront subsidy) in increasing the acceptance rates of an existing DLC tariff targeted at electric vehicle charging stations and heat pumps in Switzerland. To achieve this, we combine two randomized-controlled trials: (1) a stated-choice contingent valuation on electric vehicle owners to confirm the validity of the upfront subsidy, and (2) a revealed-preference field experiment on an existing DLC tariff proposed to the clients of a local distribution system operator. Results suggest that both measures of video and monetary intervention increase contact and subscription rates to the proposed DLC tariff, although the monetary intervention appears to be more convincing to consumers. Further, we use these results in combination with a bottom-up electricity market model to simulate the consequences on the level of system cost of a large-scale implementation of a DLC tariff.