Household Electricity Consumers' Incentive to Choose Dynamic Pricing Under Different Taxation Schemes

This chapter provides an indication of whether dynamic pricing could be competitive as a product on the Danish retail electricity market taking into account the possibility of consumers to respond to hourly prices in order to generate benefits. It estimates potential benefits of consumers switching to a dynamic pricing scheme under different assumptions of their ability to respond to prices. To gain insight into the distribution of benefits among households, the chapter uses disaggregated load profiles for different types of homes while taking into account all elements of the retail price including taxation. It also determines the gains of converting fixed per-unit adders to the electricity price into dynamic elements and evaluates the impact on the attractiveness of dynamic rates. This is done for both the fiscal levies (dynamic tax) and for the public service obligation (PSO) levy (dynamic PSO).