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"Environmental Policy with Green Consumerism"

Abstract : The presence of consumers able to respond to changes in wholesale electricity prices facilitates the penetration of renewable intermittent sources of energy such as wind or sun power. We investigate how adapting demand to intermittent electricity supply by making consumers price-responsive - thanks to smart meters and home automation appliances - impacts the energy mix. We show that it almost always reduces carbon emissions. Furthermore, when consumers are not too risk-averse, demand response is socially beneficial because the loss from exposing consumers to volatile prices is more than offset by lower production and environmental costs. However, the gain is decreasing when the proportion of reactive consumers increases. Therefore, depending on the costs of the necessary smart hardware, it may be non-optimal to equip the whole population.
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Contributor : Stefan Ambec <>
Submitted on : Tuesday, September 22, 2020 - 1:35:35 PM
Last modification on : Wednesday, June 9, 2021 - 10:00:34 AM
Long-term archiving on: : Wednesday, December 23, 2020 - 6:06:04 PM


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  • HAL Id : hal-02945517, version 1



Stefan Ambec, Philippe de Donder. "Environmental Policy with Green Consumerism". 2020. ⟨hal-02945517⟩



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