Objectives of the proposed action
The purpose of the study is to remove market barriers to energy efficiency through the determination of customer responses to different market based customer services of deregulated electricity markets. Load profile impacts from the introduction of competition will be studied for different customer groups, particularly with the focus on new communication solutions, variable pricing options and Smart-house technology. More specifically the objectives of the proposed action are to:
  • Establish specifications for load profiles in deregulated markets while taking into account the interaction between electricity and other energy resources.
  • Quantify the potential for peak power demand reductions in competitive electricity markets by the means of market solutions, dynamic pricing options, new technology solutions and information services.
  • Quantify the energy efficiency potential in competitive electricity markets by the means of market solutions, dynamic pricing options, new technology solutions and information services.
  • Determine which policy actions are the most efficient in removing existing barriers to energy efficiency.

The project will address the barriers to energy efficiency in the following ways:

Customers do not face correct energy prices: The project involves pilot case studies involving dynamic pricing options, Demand Side Bidding (DSB) and Smart-house technology in regions with direct communication and hourly metering systems installed to all types of customers. A cost-benefit analysis will show the socio-economic impacts from establishing infrastructure that facilitates the customers to receive continuous spot prices on energy.
  • Lack of and incomplete information:
    The project will survey how information services within energy efficiency can be offered through Internet and what the impacts are.
  • Institutional and legal barriers:
    The project will particularly address institutional and contractual specifications of market solutions such as DSB.
  • Technical barriers:
    The project will show how new Information and Communication Technology (ICT) can be implemented to exploit the potential for peak demand reductions and energy efficiency in a competitive electricity market.
  • Financial barriers: Through quantifying the potential for peak power demand reductions and energy efficiency a cost-benefit analysis related to different market based actions will show how financial barriers can be overcome.

The project will contribute to the energy-related objectives and policies at Community level to increase the rational use of energy in the following ways:

  • The project contributes to a better exploitation of the potential related to new ICTs through testing new ways of implementation and quantifying the potential benefits through cost-benefit analysis.
  • The project contributes to achieving the targeted 1% pr. year reduction in energy consumption in Europe through quantifying the potential for peak power reductions and energy efficiency related to different actions. This will facilitate an improved targeting of energy efficiency actions.
  • The project contributes to diurnal energy management through promoting dynamic pricing combined with ICT that improves the customers’ ability to automate price response.