The impact of (co-) ownership of renewable energy production facilities on demand flexibility

Roth, Lucas and Lowitzsch, Jens and Yildiz, Özgür and Hashani, Alban (2016): The impact of (co-) ownership of renewable energy production facilities on demand flexibility.

Abstract

The transition from fossil fuels to renewable energy sources requires financial, technical and social innovation. This is particularly true for wind and solar energy which have structural differences to fossils: they depend on weather and thus are volatile in their power production scheme. Not only must a new energy infrastructure be built, but consumers motivated to change consumption habits so as to balance demand with a volatile energy supply and to accept new technologies like smart meters. Consumer (co-)ownership has proved successful in engaging consumers in financing renewable energy infrastructures, thus becoming “prosumers”. In addition, studies also indicate that co-ownership can induce behavioral changes in energy consumption. Based on a sample of 2,143 completed questionnaires collected through an online survey, the study presented in this paper seeks to empirically analyze empirically whether (co-)ownership also has an influence on demand side flexibility.

Our results indicate a statistical correlation between (co-)ownership of renewable energy production facilities and the willingness of private households to adjust their consumption behavior. However, the relation is complex: Only when prosumers have the choice between self-consumption and sale of the surplus electricity production to the grid we observe a statistically significant effect on consumption behavior. As every kilowatt-hour not consumed is one potentially sold to the grid an economic incentive kicks in which is equally important for energy efficient behavior. To exclude a self-selection bias we have applied propensity score matching.

• Item Type: MPRA Paper
• Language: English
• Keywords: consumer ownership; renewable energy; energy consumption behavior; flexibility, demand response; demand side management; propensity score matching
• Subjects: C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q21 - Demand and Supply ; Prices; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply ; Prices; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy

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