HeatReserves: Demand Response for Ancillary Services
Type
applied research project
Start Date
01 April 2013
End Date
31 March 2017
Status
ongoing
Keywords
Consumer behaviour
smart grids
demand response
Description
Major promises of smart grids are to boost energy efficiency and to match supply and demand. Important in this regard is electricity storage. However we need new business models, which feature solutions that are feasible from a technology and economic perspective and which provide value to customers. The project focuses on electricity storage using thermal loads and appropriate demand response schemes.

HeatReserves is a joint four-year research project funded by nano-tera.ch in which partners from the ETH Zürich, Swissgrid, EMPA and the University of St.Gallen investigate solutions for electrical energy storage.

The team at the University of St.Gallen is leading WP5: Consumer involvement, management and policy

In WP5 we will experimentally test the mechanisms that help consumers to adapt their daily routines in energy usage such that the demand response scheme developed in Work Packages 2 and 3 can be implemented. For that we broadly review and test different psychological theories which propose a wide range of insights in how to change customer behaviour and consumer decision making regarding participation in demand response programs. We will investigate which psychological interventions - e.g. the influence of induced hypocrisy under different construal mindsets - are most effective for engaging consumers in demand response programs. Based on our findings we develop implications for demand response contract design, incentive schemes, business model design and energy policy.
Member contributor(s)
Partner(s)
ETH Zürich, Swissgrid, EMPA and the University of St. Gallen
Funder(s)
Topic(s)
Consumer behaviour
smart grids
demand response
Method(s)
qualitative and quantitative empirical methods (experiments)
Range
HSG Internal
Range (De)
HSG Intern
Division(s)
Eprints ID
222779
Reference Number
20NA21_145915

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  • Publication
    Paying for flexibility - Increasing customer participation in demand response programs through rewards and punishments
    ( 2014-09-03)
    Gamma, Karoline
    ;
    Loock, Moritz
    ;
    Cometta, Claudio
    Steering electricity demand will be a crucial aspect for guaranteeing energy system reliability when the share of fluctuating electricity supply from renewable energy increases. Thus, demand response programs (DR) play an important role in future energy systems (Hancher, 2013). However, an open question evolves around the question of how to best help customers to accept these programs (Hancher, 2013; Steg & Vlek, 2009, EU, 2003; He, Keyaerts et al., 2013). It is commonly assumed that customers should be financially compensated when they participate in DR (Hancher, 2013; DOE, 2006). This translates into understanding "Paying for flexibility" as rewarding DR participants for the provided flexibility. However, "Paying for flexibility" could also be understood in the way that customers will have to pay if they still want to have the flexibility of using electricity whenever and wherever they want in the future. In this case, DR would - instead of rewarding customers for participation through financial compensation - punish those customers who do not participate through the introduction of service fees. Similar to rewards, punishments are a measure of operant conditioning to influence behaviour (Skinner, 1938) and they have effectively been used in various social systems, e.g. traffic fines for speeding. In the light of recent theories of decision-making that distinguish between heuristic or "automatic" and information-based or "deliberative" decision-making processes (Weber & Johnson, 2009), the paper at hand investigates the role of punishment and reward for consumer acceptance of DR. Due to the common assumption that rewards are the appropriate intervention to increase customer acceptance of DR (Hancher, 2013; DOE, 2006) which is in line with established views in environmental behaviour (Osbaldiston & Schott, 2012; Kazdin, 2009; Steg & Vlek, 2009; Iyer & Kashyap, 2007; Abrahamse et al. 2005; Geller, 1995), electric utilities are inclined to design DR based on rewards. However, in an experimental study with 151 undergraduate students in their role of energy consumers at a business school in Switzerland, we find that DR schemes based on punishments are more effective in increasing customer participation in the program compared to DR schemes based on rewards. These findings can be explained with prospect theory and loss aversion (Kahneman & Tversky, 1984). We also find that there is no significant effect of punishments and rewards on customer loyalty towards the firm and attitude towards joining the DR. Thus, punishments are more effective in increasing customer participation without jeopardizing the loyalty of a company's customer base and the consumer's attitude towards joining DR. Additionally, they appear more efficient from an economic point of view as they result in lower costs (Balliet et al., 2011; Gächter, 2012): whereas the variable costs for reward-based DR increase with each participating customer, there are no variable costs for punishment-based DR. Based on our findings we encourage firms, policy makers and research not to be afraid of environmental fines and optimize the design of their customer intervention measures.?
    Type: presentation
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/86406
  • Publication
    Customer Acceptance of Smart Grid: The role of psychological interventions and customer value
    ( 2013-11-12)
    Kuenzel, Karoline
    Ph.D. Workshop at Energieinformatik 2013, Vienna Abstract long paper: Besides efficiently managing the energy supply - which has been the focus in the past - the efficient and effective management of the energy demand is nowadays considered to be of utmost importance in order to meet the energy challenges of the future. Politicians, managers, engineers and researchers alike agree on so-called smart grids being a promising solution in that regard. The smart grid provides various solutions, products and services - such as demand response programs, real-time feedback systems, smart metering solutions etc. -, which enable a better management of the demand for energy. However, these solutions must be employed at customer side and the customers need to accept and use them in their daily life. Only if customers actively accept and use these solutions and thus actively participate in the smart grid, one can fully exploit the opportunities regarding energy efficiency and demand control they offer. Thus, it is crucial to understand which factors increase customers' acceptance of smart grid technologies and services. In this PhD different interventions, including psychological interventions, will be tested in order to identify acceptance factors that increase customer participation in a smart grid. The results of this PhD should prove useful for managers as well as for policy makers when designing smart grid applications, developing products and service bundles, effective business models and incentive schemes.
    Type: presentation
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/88470
  • Publication
    The flexible prosumer: Measuring the willingness to co-create distributed flexibility
    (Elsevier Science, 2018-03)
    Kubli, Merla
    ;
    Loock, Moritz
    ;
    Wüstenhagen, Rolf
    Rising shares of fluctuating renewables increase the need for flexibility in the power market. At the same time, the emergence of the prosumer has created new opportunities for co-creation of distributed flexibility. As of yet, there is surprisingly little empirical analysis in terms of whether individuals are actually ready to co-create flexibility, and if so, under which conditions these resources can be mobilized by grid operators or electricity supply companies. We address this gap in the energy economics literature with three studies analyzing in total 7′216 individual decisions in a series of choice experiments with 902 study participants in three main domains of residential energy prosumption: (1) solar PV plus storage, (2) electric mobility, (3) heat pumps. We develop a novel measure of the prosumers’ willingness to co-create flexibility, and solicit their preferences for power supply contracts with varying levels of flexibility to derive implied discomfort costs. Our results indicate that current and potential electric car and solar PV users exhibit a higher willingness to co-create flexibility than heat pump users. Reaping the potential in those two domains requires taking the prosumer perspective into account when designing policy instruments and creating adequate business models.
    Type: journal article
    Journal: Energy policy
    Volume: 114
    URL: http://www.sciencedirect.com/science/article/pii/S0301421517308704
    DOI: 10.1016/j.enpol.2017.12.044
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/100709
    Scopus© Citations 142