Title: Identification of consumers' price responses in the dynamic pricing of electricity
Authors: Mika Räsänen, Jukka Ruusunen and Raimo P. Hämäläinen
Status: Proceedings of the IEEE International Conference on Systems, Man and Cybernetics, Vancouver, British Columbia, Canada, IEEE Systems, Man and Cybernetics Society, Vol 2, October 22-25, 1995, pp. 1182-1187.
This paper considers modeling of residential consumers’ price responses in the dynamic pricing of electricity. The consumers’ behaviour id described by a utility function indicating the benefit of different daily electricity consumption patterns. We approximate this function by a quadratic form in the neighborhood of the consumers’ nominal consumption patterns. The effects of outdoor temperature are taken into account, since outdoor temperature, in addition to the rate, affects the shape of the consumption pattern. Data used in model identification is obtained from a Finnish dynamic pricing experiment. The results suggest that the consumers consider the whole daily price pattern when they plan their daily electricity use. The model based on the local approximation of the consumers' utility function predicts the consumption pattern well when the daily price pattern resembles the patterns used in the model identification process.