Demand-side management by electric utilities in Switzerland: Analyzing its impact on residential electricity demand

- We estimate the impact of demand-side management practices on electricity demand.
- We use data from a survey conducted on 30 Swiss utilities from 2006 to 2012.
- A 10% increase in DSM spending reduces per customer electricity consumption by 0.14%.
- Current DSM practices in Switzerland have a statistically significant effect.

In this paper, we use panel data from a survey conducted on 30 utilities in Switzerland to estimate the impact of demand-side management (DSM) activity on residential electricity demand. Using the variation in DSM activity within utilities and across utilities over time we identify the impact of DSM programs and find that their presence reduces per customer residential electricity consumption by around 5%. If we consider monetary spending, the effect of a 10% increase in DSM spending causes a 0.14% reduction in per customer residential electricity consumption. The cost of saving a kilowatt hour is around 0.04CHF while the average cost of producing and distributing electricity in Switzerland is around 0.18CHF per kilowatt hour. We conclude that current DSM practices in Switzerland have a statistically significant effect on reducing the demand for residential electricity.