Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford...
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Reforming Japan’s Power Industry
Koichiro Ito
Stanford Institute for Economic Policy Research, Stanford University
February 27, 2012
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Outline
2
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outline of the talk
1) Brief introduction of Japan’s electricity industry
2) Key issues for reforming Japan’s electricity industry
3) Smart grid and dynamic pricing experiments in Japan
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Four key points to understand Japan’s electricity industry
3
1) Regulated regional monopoly
2) Vertical integration
3) Partial deregulation since 1990’s
4) Adequate & stable supply until 3/11 and few demand response policies
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1) Regulated regional monopoly - 10 regional electric utilities
4
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Partial deregulation in 1990’s
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
But each region is still almost entirely covered by a regulated monopolist
Source: msnbc.com
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2) Vertical integration - the electricity industry is not yet “unbundled”
5
Generation
Transmission
Distribution
RetailingSource: http://www.chem.ucla.edu/C125/Week1-1.html
Vertical integration
![Page 6: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/6.jpg)
2) Vertical integration - the electricity industry is not yet “unbundled”
5
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Before 1990’s: Vertical integration in most countries
Generation
Transmission
Distribution
RetailingSource: http://www.chem.ucla.edu/C125/Week1-1.html
Vertical integration
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2) Vertical integration - the electricity industry is not yet “unbundled”
5
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Before 1990’s: Vertical integration in most countries
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
After 1990’s : Transmission and distribution were unbundled in many counties
Generation
Transmission
Distribution
RetailingSource: http://www.chem.ucla.edu/C125/Week1-1.html
Vertical integration
![Page 8: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/8.jpg)
2) Vertical integration - the electricity industry is not yet “unbundled”
5
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Before 1990’s: Vertical integration in most countries
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
After 1990’s : Transmission and distribution were unbundled in many counties
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
In Japan, transmission and distribution were not yet unbundled
Generation
Transmission
Distribution
RetailingSource: http://www.chem.ucla.edu/C125/Week1-1.html
Vertical integration
![Page 9: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/9.jpg)
2) Vertical integration - the electricity industry is not yet “unbundled”
5
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Before 1990’s: Vertical integration in most countries
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
After 1990’s : Transmission and distribution were unbundled in many counties
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
In Japan, transmission and distribution were not yet unbundled
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional monopolists own and operate the four parts almost entirely
Generation
Transmission
Distribution
RetailingSource: http://www.chem.ucla.edu/C125/Week1-1.html
Vertical integration
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3) Partial deregulation since 1990‘s
6
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3) Partial deregulation since 1990‘s
6
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Three main phases of deregulation (1995, 2000, and 2003)
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3) Partial deregulation since 1990‘s
6
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Three main phases of deregulation (1995, 2000, and 2003)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Main policy objective: lower electricity price
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3) Partial deregulation since 1990‘s
6
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Three main phases of deregulation (1995, 2000, and 2003)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Main policy objective: lower electricity price
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outcome:
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3) Partial deregulation since 1990‘s
6
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Three main phases of deregulation (1995, 2000, and 2003)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Main policy objective: lower electricity price
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outcome:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Partial deregulation in generation (1995) and retailing (2000)
![Page 15: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/15.jpg)
3) Partial deregulation since 1990‘s
6
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Three main phases of deregulation (1995, 2000, and 2003)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Main policy objective: lower electricity price
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outcome:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Partial deregulation in generation (1995) and retailing (2000)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Failed to unbundle transmission and distribution (2003) for a few reasons
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3) Partial deregulation since 1990‘s
6
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Three main phases of deregulation (1995, 2000, and 2003)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Main policy objective: lower electricity price
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outcome:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Partial deregulation in generation (1995) and retailing (2000)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Failed to unbundle transmission and distribution (2003) for a few reasons
- Opposition from power companies
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3) Partial deregulation since 1990‘s
6
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Three main phases of deregulation (1995, 2000, and 2003)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Main policy objective: lower electricity price
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outcome:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Partial deregulation in generation (1995) and retailing (2000)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Failed to unbundle transmission and distribution (2003) for a few reasons
- Opposition from power companies
- Lack of political leadership
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3) Partial deregulation since 1990‘s
6
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Three main phases of deregulation (1995, 2000, and 2003)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Main policy objective: lower electricity price
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outcome:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Partial deregulation in generation (1995) and retailing (2000)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Failed to unbundle transmission and distribution (2003) for a few reasons
- Opposition from power companies
- Lack of political leadership
- Critiques for the California electricity crisis
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4) Adequate & stable supply and few demand response policies
7
Japan US UK Germany France Korea16 292 75.7 19.3 61.6 17.2
Japan USIndustrial ���� �
Residential ���� ����
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4) Adequate & stable supply and few demand response policies
7
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Adequate and stable supply until 3/11
Japan US UK Germany France Korea16 292 75.7 19.3 61.6 17.2
Japan USIndustrial ���� �
Residential ���� ����
![Page 21: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/21.jpg)
4) Adequate & stable supply and few demand response policies
7
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Adequate and stable supply until 3/11
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Annual average hours of blackouts per customer in 2007:
Japan US UK Germany France Korea16 292 75.7 19.3 61.6 17.2
Japan USIndustrial ���� �
Residential ���� ����
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4) Adequate & stable supply and few demand response policies
7
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Adequate and stable supply until 3/11
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Annual average hours of blackouts per customer in 2007:
Source: Japanese Agency for Natural Resource and Energy (2011)
Japan US UK Germany France Korea16 292 75.7 19.3 61.6 17.2
Japan USIndustrial ���� �
Residential ���� ����
![Page 23: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/23.jpg)
4) Adequate & stable supply and few demand response policies
7
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Adequate and stable supply until 3/11
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Annual average hours of blackouts per customer in 2007:
Source: Japanese Agency for Natural Resource and Energy (2011)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Higher electricity prices: cents per kWh (source: EIA 2008)
Japan US UK Germany France Korea16 292 75.7 19.3 61.6 17.2
Japan USIndustrial ���� �
Residential ���� ����
![Page 24: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/24.jpg)
4) Adequate & stable supply and few demand response policies
7
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Adequate and stable supply until 3/11
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Annual average hours of blackouts per customer in 2007:
Source: Japanese Agency for Natural Resource and Energy (2011)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Higher electricity prices: cents per kWh (source: EIA 2008) Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utilities build their capacity to meet any levels of max demand
Japan US UK Germany France Korea16 292 75.7 19.3 61.6 17.2
Japan USIndustrial ���� �
Residential ���� ����
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4) Adequate & stable supply and few demand response policies
7
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Adequate and stable supply until 3/11
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Annual average hours of blackouts per customer in 2007:
Source: Japanese Agency for Natural Resource and Energy (2011)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Higher electricity prices: cents per kWh (source: EIA 2008) Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utilities build their capacity to meet any levels of max demand
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Customers have enjoyed the stable supply in exchange for the high price
Japan US UK Germany France Korea16 292 75.7 19.3 61.6 17.2
Japan USIndustrial ���� �
Residential ���� ����
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4) Adequate & stable supply and few demand response policies
7
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Adequate and stable supply until 3/11
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Annual average hours of blackouts per customer in 2007:
Source: Japanese Agency for Natural Resource and Energy (2011)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Higher electricity prices: cents per kWh (source: EIA 2008) Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utilities build their capacity to meet any levels of max demand
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Customers have enjoyed the stable supply in exchange for the high price
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Few “demand response” policies to shift peak demand to off-peak
Japan US UK Germany France Korea16 292 75.7 19.3 61.6 17.2
Japan USIndustrial ���� �
Residential ���� ����
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Outline
8
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outline of the talk
1) Brief introduction of Japan’s electricity industry
2) Key issues for reforming Japan’s electricity industry
3) Smart grid and dynamic pricing experiments in Japan
![Page 28: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/28.jpg)
a) How to unbundle transmission and distribution?
9
Generation
Transmission
Distribution
Retailing
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Unbundling is necessary to open the electricity market for new entrants
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
After unbundling, who should 1) own and 2) operate the system?
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b) How to restructure the regional electric utilities?
10
![Page 30: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/30.jpg)
b) How to restructure the regional electric utilities?
10
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Inter-regional transactions are low (5.2% in 2008) despite the deregulation
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b) How to restructure the regional electric utilities?
10
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Inter-regional transactions are low (5.2% in 2008) despite the deregulation
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utilities have not invested much on the inter-regional transmission
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b) How to restructure the regional electric utilities?
10
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Inter-regional transactions are low (5.2% in 2008) despite the deregulation
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utilities have not invested much on the inter-regional transmission
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
This under-investment was a reason for the limited "exibility in transmission right after 3/11, which caused rolling blackouts in Tokyo
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b) How to restructure the regional electric utilities?
10
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Inter-regional transactions are low (5.2% in 2008) despite the deregulation
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utilities have not invested much on the inter-regional transmission
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
This under-investment was a reason for the limited "exibility in transmission right after 3/11, which caused rolling blackouts in Tokyo
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The central problem is, the wholesale and retail markets are still far from competitive despite the deregulation since 1990’s
![Page 34: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/34.jpg)
c) How to make the wholesale and retail markets more competitive?
11
![Page 35: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/35.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
![Page 36: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/36.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
![Page 37: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/37.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (1995) allowed IPP (independent power producer) to enter
![Page 38: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/38.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (1995) allowed IPP (independent power producer) to enter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, their share is still very small
![Page 39: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/39.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (1995) allowed IPP (independent power producer) to enter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, their share is still very small
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Also, most transactions are bilateral long-run contracts with regional utilities
![Page 40: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/40.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (1995) allowed IPP (independent power producer) to enter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, their share is still very small
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Also, most transactions are bilateral long-run contracts with regional utilities
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Transactions in the wholesale market (JEPX) is less than 1% of total volume
![Page 41: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/41.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (1995) allowed IPP (independent power producer) to enter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, their share is still very small
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Also, most transactions are bilateral long-run contracts with regional utilities
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Transactions in the wholesale market (JEPX) is less than 1% of total volume
Is the retail market competitive now?
![Page 42: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/42.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (1995) allowed IPP (independent power producer) to enter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, their share is still very small
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Also, most transactions are bilateral long-run contracts with regional utilities
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Transactions in the wholesale market (JEPX) is less than 1% of total volume
Is the retail market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
63% of the retail markets are now deregulated
![Page 43: Reforming Japan’s Power Industry · Reforming Japan’s Power Industry Koichiro Ito Stanford Institute for Economic Policy Research, Stanford University February 27, 2012](https://reader033.fdocuments.net/reader033/viewer/2022050303/5f6bbbce4b1abc21d060fd9f/html5/thumbnails/43.jpg)
c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (1995) allowed IPP (independent power producer) to enter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, their share is still very small
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Also, most transactions are bilateral long-run contracts with regional utilities
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Transactions in the wholesale market (JEPX) is less than 1% of total volume
Is the retail market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
63% of the retail markets are now deregulated
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (2000) allowed PPS (Power producer and Supplier) to enter
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c) How to make the wholesale and retail markets more competitive?
11
Is the wholesale market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Regional utility companies still generate over 70% of total power in Japan
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (1995) allowed IPP (independent power producer) to enter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, their share is still very small
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Also, most transactions are bilateral long-run contracts with regional utilities
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Transactions in the wholesale market (JEPX) is less than 1% of total volume
Is the retail market competitive now?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
63% of the retail markets are now deregulated
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The deregulation (2000) allowed PPS (Power producer and Supplier) to enter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, their share of the market is about 2%
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12
80%$
82%$
84%$
86%$
88%$
90%$
92%$
94%$
96%$
98%$
100%$
1/23%
1/24%
1/25%
1/26%
1/27%
1/28%
1/29%
1/30%
1/31% 2/1
%2/2%
2/3%
2/4%
2/5%
2/6%
2/7%
2/8%
2/9%2/10%
2/11%
2/12%
2/13%
2/14%
2/15%
2/16%
2/17%
Peak./me$consum
p/on
/max$$cap
acity
$for$e
ach$da
y$
(Peak./me$consump/on/max$capacity)$in$Kyushu$electric$u/lity$service$areas$in$Jan$and$Feb$2012$
d) How to take advantage of “smart grid” technology?
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Peak time demand is reaching near the max capacity level this winter
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Need to shift peak time demand to off-peak
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Better to use market mechanisms rather than rationing
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13
Yen/kWh
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Hour of day
40
20
0
160
140
120
100
80
60
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d) How to take advantage of “smart grid” technology?
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13
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Among other things, smart grid and smart meter technology can be used to:
Yen/kWh
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Hour of day
40
20
0
160
140
120
100
80
60
������
����
����
�����
�����
��� �
d) How to take advantage of “smart grid” technology?
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13
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Among other things, smart grid and smart meter technology can be used to:
1) Allow customers to have dynamic (time-varying) pricing
Yen/kWh
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Hour of day
40
20
0
160
140
120
100
80
60
������
����
����
�����
�����
��� �
d) How to take advantage of “smart grid” technology?
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13
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Among other things, smart grid and smart meter technology can be used to:
1) Allow customers to have dynamic (time-varying) pricing
2) Allow customers to access real-time price and usage information
Yen/kWh
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Hour of day
40
20
0
160
140
120
100
80
60
������
����
����
�����
�����
��� �
d) How to take advantage of “smart grid” technology?
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13
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Among other things, smart grid and smart meter technology can be used to:
1) Allow customers to have dynamic (time-varying) pricing
2) Allow customers to access real-time price and usage information
3) Make the most use of EV and plug-in hybrid vehicles as “storage”
Yen/kWh
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Hour of day
40
20
0
160
140
120
100
80
60
������
����
����
�����
�����
��� �
d) How to take advantage of “smart grid” technology?
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Outline
14
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Outline of the talk
1) Brief introduction of Japan’s electricity industry
2) Key issues for reforming Japan’s electricity industry
3) Smart grid and dynamic pricing experiments in Japan
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Peak time demand is reaching near the maximum capacity level
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Reasons:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Not only Fukushima but also other nuclear power plants were stopped
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Cold wether hit many areas in Japan this winter 15
80%$
82%$
84%$
86%$
88%$
90%$
92%$
94%$
96%$
98%$
100%$
1/23%
1/24%
1/25%
1/26%
1/27%
1/28%
1/29%
1/30%
1/31% 2/1
%2/2%
2/3%
2/4%
2/5%
2/6%
2/7%
2/8%
2/9%2/10%
2/11%
2/12%
2/13%
2/14%
2/15%
2/16%
2/17%
Peak./me$consum
p/on
/max$$cap
acity
$for$e
ach$da
y$
(Peak./me$consump/on/max$capacity)$in$Kyushu$electric$u/lity$service$areas$in$Jan$and$Feb$2012$
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Generally, the cost of electricity is very high at the peak demand periods
16
economic growth throughout the western United States shifted the supply/demandbalance and caused the market to tighten up suddenly. Although the investor-owned utilities had by 2000 received permission to buy a limited amount of powerunder long-term contracts, they were doing very little of it. They were still procur-ing about 90 percent of their “net short” position—the power that they were notproducing with their own generation and did not have under contracts thatpredated the restructuring—in the Power Exchange’s day-ahead or the systemoperator’s real-time market.
In addition, cost increases for thermal generating plants (in California, nearlyall of which are natural-gas fueled) raised production costs and, importantly, did somuch more for the marginal production units. Figure 3 shows the marginal costcurve from all thermal plant capacity in California. This omits production fromnuclear and hydroelectric production, which are inframarginal in nearly all hours,and renewable sources (wind, solar and geothermal), which have less reliableproduction patterns. Thermal plant production is nearly always the marginal powersource in California.
The lowest line is the marginal cost curve during July 1998, when gas priceswere low and the costs of pollution permits for emitting nitrogen oxide werenegligible. The next highest line shows costs during June 2000, when natural gasprices were almost double their 1998 levels. Not only has the curve shifted up, it hasrotated, with the costs of the most expensive units increasing more, because themost expensive units convert natural gas to electricity at about half the efficiencyrate of the least expensive generators. By August 2000, shown in the highest line,the problem was further exacerbated as the price of nitrogen oxide pollution
Figure 3California Thermal-Generation Supply Curve(various months)
The Trouble With Electricity Markets 199
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Generally, the cost of electricity is very high at the peak demand periods
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Example: the marginal cost curve of thermal plants in CA (Borenstein 2002)
16
economic growth throughout the western United States shifted the supply/demandbalance and caused the market to tighten up suddenly. Although the investor-owned utilities had by 2000 received permission to buy a limited amount of powerunder long-term contracts, they were doing very little of it. They were still procur-ing about 90 percent of their “net short” position—the power that they were notproducing with their own generation and did not have under contracts thatpredated the restructuring—in the Power Exchange’s day-ahead or the systemoperator’s real-time market.
In addition, cost increases for thermal generating plants (in California, nearlyall of which are natural-gas fueled) raised production costs and, importantly, did somuch more for the marginal production units. Figure 3 shows the marginal costcurve from all thermal plant capacity in California. This omits production fromnuclear and hydroelectric production, which are inframarginal in nearly all hours,and renewable sources (wind, solar and geothermal), which have less reliableproduction patterns. Thermal plant production is nearly always the marginal powersource in California.
The lowest line is the marginal cost curve during July 1998, when gas priceswere low and the costs of pollution permits for emitting nitrogen oxide werenegligible. The next highest line shows costs during June 2000, when natural gasprices were almost double their 1998 levels. Not only has the curve shifted up, it hasrotated, with the costs of the most expensive units increasing more, because themost expensive units convert natural gas to electricity at about half the efficiencyrate of the least expensive generators. By August 2000, shown in the highest line,the problem was further exacerbated as the price of nitrogen oxide pollution
Figure 3California Thermal-Generation Supply Curve(various months)
The Trouble With Electricity Markets 199
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Generally, the cost of electricity is very high at the peak demand periods
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Example: the marginal cost curve of thermal plants in CA (Borenstein 2002)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Expensive power plants have to be run at the peak time
16
economic growth throughout the western United States shifted the supply/demandbalance and caused the market to tighten up suddenly. Although the investor-owned utilities had by 2000 received permission to buy a limited amount of powerunder long-term contracts, they were doing very little of it. They were still procur-ing about 90 percent of their “net short” position—the power that they were notproducing with their own generation and did not have under contracts thatpredated the restructuring—in the Power Exchange’s day-ahead or the systemoperator’s real-time market.
In addition, cost increases for thermal generating plants (in California, nearlyall of which are natural-gas fueled) raised production costs and, importantly, did somuch more for the marginal production units. Figure 3 shows the marginal costcurve from all thermal plant capacity in California. This omits production fromnuclear and hydroelectric production, which are inframarginal in nearly all hours,and renewable sources (wind, solar and geothermal), which have less reliableproduction patterns. Thermal plant production is nearly always the marginal powersource in California.
The lowest line is the marginal cost curve during July 1998, when gas priceswere low and the costs of pollution permits for emitting nitrogen oxide werenegligible. The next highest line shows costs during June 2000, when natural gasprices were almost double their 1998 levels. Not only has the curve shifted up, it hasrotated, with the costs of the most expensive units increasing more, because themost expensive units convert natural gas to electricity at about half the efficiencyrate of the least expensive generators. By August 2000, shown in the highest line,the problem was further exacerbated as the price of nitrogen oxide pollution
Figure 3California Thermal-Generation Supply Curve(various months)
The Trouble With Electricity Markets 199
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Generally, the cost of electricity is very high at the peak demand periods
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Example: the marginal cost curve of thermal plants in CA (Borenstein 2002)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Expensive power plants have to be run at the peak time
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The social cost would be even larger (e.g. blackouts) if demand exceeds supply
16
economic growth throughout the western United States shifted the supply/demandbalance and caused the market to tighten up suddenly. Although the investor-owned utilities had by 2000 received permission to buy a limited amount of powerunder long-term contracts, they were doing very little of it. They were still procur-ing about 90 percent of their “net short” position—the power that they were notproducing with their own generation and did not have under contracts thatpredated the restructuring—in the Power Exchange’s day-ahead or the systemoperator’s real-time market.
In addition, cost increases for thermal generating plants (in California, nearlyall of which are natural-gas fueled) raised production costs and, importantly, did somuch more for the marginal production units. Figure 3 shows the marginal costcurve from all thermal plant capacity in California. This omits production fromnuclear and hydroelectric production, which are inframarginal in nearly all hours,and renewable sources (wind, solar and geothermal), which have less reliableproduction patterns. Thermal plant production is nearly always the marginal powersource in California.
The lowest line is the marginal cost curve during July 1998, when gas priceswere low and the costs of pollution permits for emitting nitrogen oxide werenegligible. The next highest line shows costs during June 2000, when natural gasprices were almost double their 1998 levels. Not only has the curve shifted up, it hasrotated, with the costs of the most expensive units increasing more, because themost expensive units convert natural gas to electricity at about half the efficiencyrate of the least expensive generators. By August 2000, shown in the highest line,the problem was further exacerbated as the price of nitrogen oxide pollution
Figure 3California Thermal-Generation Supply Curve(various months)
The Trouble With Electricity Markets 199
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Generally, the cost of electricity is very high at the peak demand periods
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Example: the marginal cost curve of thermal plants in CA (Borenstein 2002)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Expensive power plants have to be run at the peak time
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The social cost would be even larger (e.g. blackouts) if demand exceeds supply
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, usually, electricity prices do not re"ect these costs:
16
economic growth throughout the western United States shifted the supply/demandbalance and caused the market to tighten up suddenly. Although the investor-owned utilities had by 2000 received permission to buy a limited amount of powerunder long-term contracts, they were doing very little of it. They were still procur-ing about 90 percent of their “net short” position—the power that they were notproducing with their own generation and did not have under contracts thatpredated the restructuring—in the Power Exchange’s day-ahead or the systemoperator’s real-time market.
In addition, cost increases for thermal generating plants (in California, nearlyall of which are natural-gas fueled) raised production costs and, importantly, did somuch more for the marginal production units. Figure 3 shows the marginal costcurve from all thermal plant capacity in California. This omits production fromnuclear and hydroelectric production, which are inframarginal in nearly all hours,and renewable sources (wind, solar and geothermal), which have less reliableproduction patterns. Thermal plant production is nearly always the marginal powersource in California.
The lowest line is the marginal cost curve during July 1998, when gas priceswere low and the costs of pollution permits for emitting nitrogen oxide werenegligible. The next highest line shows costs during June 2000, when natural gasprices were almost double their 1998 levels. Not only has the curve shifted up, it hasrotated, with the costs of the most expensive units increasing more, because themost expensive units convert natural gas to electricity at about half the efficiencyrate of the least expensive generators. By August 2000, shown in the highest line,the problem was further exacerbated as the price of nitrogen oxide pollution
Figure 3California Thermal-Generation Supply Curve(various months)
The Trouble With Electricity Markets 199
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Generally, the cost of electricity is very high at the peak demand periods
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Example: the marginal cost curve of thermal plants in CA (Borenstein 2002)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Expensive power plants have to be run at the peak time
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
The social cost would be even larger (e.g. blackouts) if demand exceeds supply
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
However, usually, electricity prices do not re"ect these costs:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Most customers do NOT pay “time-varying” electricity prices16
economic growth throughout the western United States shifted the supply/demandbalance and caused the market to tighten up suddenly. Although the investor-owned utilities had by 2000 received permission to buy a limited amount of powerunder long-term contracts, they were doing very little of it. They were still procur-ing about 90 percent of their “net short” position—the power that they were notproducing with their own generation and did not have under contracts thatpredated the restructuring—in the Power Exchange’s day-ahead or the systemoperator’s real-time market.
In addition, cost increases for thermal generating plants (in California, nearlyall of which are natural-gas fueled) raised production costs and, importantly, did somuch more for the marginal production units. Figure 3 shows the marginal costcurve from all thermal plant capacity in California. This omits production fromnuclear and hydroelectric production, which are inframarginal in nearly all hours,and renewable sources (wind, solar and geothermal), which have less reliableproduction patterns. Thermal plant production is nearly always the marginal powersource in California.
The lowest line is the marginal cost curve during July 1998, when gas priceswere low and the costs of pollution permits for emitting nitrogen oxide werenegligible. The next highest line shows costs during June 2000, when natural gasprices were almost double their 1998 levels. Not only has the curve shifted up, it hasrotated, with the costs of the most expensive units increasing more, because themost expensive units convert natural gas to electricity at about half the efficiencyrate of the least expensive generators. By August 2000, shown in the highest line,the problem was further exacerbated as the price of nitrogen oxide pollution
Figure 3California Thermal-Generation Supply Curve(various months)
The Trouble With Electricity Markets 199
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Usually, these peak demand periods are limited hours per year
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Load duration curve (left) and wholesale price duration curve (right) in PJM
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Peak demand periods are limited hours per year
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Thus, wholesale electricity prices are very high only at limited hours per year
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Large economic gains just by shifting this peak demand to off-peak
17
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Dynamic (time-varying) pricing can be used to mitigate the problem
18
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Basic idea:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Set high prices only for the peak demand hours for “emergency days”
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Lower off-peak prices
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Customers get larger incentives to shift their peak time consumption
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
No technological barriers now with smart meters
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Several experiments in the US
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Frank Wolak (2011) -‐ Field experiment in D.C.
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Finds significant peak demand reduc?ons by dynamic pricing
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Smart grid and dynamic pricing experiments in four locations in Japan
19
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Sponsored by the government and partnered with companies and academics
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Current main target: residential customers
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Different “treatments” in the four locations
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Customers are randomly assigned to different treatment groups
11
Yokohama Large-scale (4000) Smart Homes H�Energy management system wh ich in tegra tes HEMS, BEMS, CEMS927000 kW: H�Use of heat and unused energy H�The largest scale 4000 Smart houses, 2000 EVs�
Toyota Plugin HEV cars (next Plius)
H� EV/PHEV deployment with V2H and V2G
H� Use of heat and unused energy as well as electricity
H� Demand response with more than 70 home
Kyushu Dynamic Pricing H�Energy management system which integrates demand-side managements (HEMS, BEMS) and main grid system. H�Real-time pricing management in 70 companies and 200 houses
Kyoto Osaka Nara High-tech HEMS H� ‘Smart tap’ which visualizes
energy consumption and controls home electronics energy usage.
H� ‘Electric power virtual coloring’ technology that actualizes t o t a l h o m e e n e r g y management system.
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Example of the price schedule for residential customers
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
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Critical peak pricing (CPP) with variable peak prices
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Customers get “day-ahead” notice about the peak price for tomorrow
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Peak hours for summer (1pm to 5pm)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
High peak prices are announced when temperature exceeds a “cutoff” level
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Customers get noti#ed by phone, email, and through their information device 20
Yen/kWh
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Hour of day
40
20
0
160
140
120
100
80
60
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Treatments to be examined in addition to dynamic pricing
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Information devices integrated with HEMS (Home Energy Management System)
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
In-home display
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Smart phone with a smart energy application
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Automated demand response (ADR) technology
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Electric appliances with ADR in response to time-varying electricity prices
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Electric and plug-in hybrid vehicles
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Long-time lease for free for some customers
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
EV and PHV can be potentially used as “storage”
Goals of the experiments:
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Examine what is possible with smart grid and smart meter technologies
Introduction
Research question: How do consumers respond to nonlinear price schedules?
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
In the US, 34% of GHG emissions come from electricity (EPA 2007)
Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)Electricity pricesIn the US, 34% of GHG emissions come from electricity (EPA 2007)
6 / 7
Create a platform for #rms to explore new business opportunities 21