Real-time pricing revisited: Demand flexibility in the presence of micro-generation

An understanding of household demand response (DR) is important in view of increasingly smart grids in which high shares of renewable supply are being promoted. In addition, an important development in the Nordic market relates to increasing thrust on household solar photo-voltaic (PV) panels. In view of the potential for interaction between dynamic pricing-driven and PV generation-driven load changes, an analysis of the combined effects in relation to the system profile is important, not least because this can affect the nature of benefits to households and to the grid. Using a unique and detailed dataset on household electricity consumption, in combination with simulated solar panel micro-generation data, these aspects are explored here using a demand framework drawn from the previous literature. Our findings indicate that even with low price responsiveness, household response to dynamic pricing can lead to load changes with sizeable benefits. In addition, the introduction of PV panels appear to be beneficial to the electric grid, largely due to the time pattern of winter PV generation. Overall, our findings provide tentative support to the hypothesis that dynamic pricing, by incentivizing households to provide demand response at appropriate times, can aid in integration of renewables.