SmartGridCity USA fails on Dynamic Pricing

Some reports have been released from experiments in SmartgridCity (Boulder, Colorado USA) with various dynamic pricing strategies for electricity. General lessons:

  • CPP (critical Peak Pricing) can work, even with purely manual response.
  • In home automation works; smart thermostats to stear the AC work quite well.
  • BUT: General response is low, benefits are marginal and participation decreases over time.
uc-smartenergy view is that utilities need to better understand the retail customer’s energy use decision trajectory. Almost all energy use can be traced to purchase decisions. Once equipment is in active use it becomes almost autonomous: decisions to use, not to use, let alone shift in time are very difficult to influence. Simply because the price effect is very small compared to human convenience factors involved. A case of simple psycho-economics. Build the intelligence into the equipment and make it practically effortless to use works as the smart thermostat’s relative success proves. Some substance in the reward is still necessary however.

The general state of dynamic pricing in the USA is:

Time of use (TOU) rates are available to only 1% of residential customers, according to the Brattle Group, and only 1% of those ratepayers use them.


Here is the link to the original Utilitydive New item: Smart meters are here. So why isnt dynamic pricing? | Utility Dive.

Here are the links to the two SmartGridCity reports on the web:

Here is another background article on dynamic pricing effectiveness and the background behind its lack of success with smaller customers (which is not related to lack of smart meters).


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