Intrinsic Motivation to Promote Demand Flexibility: A Field Experiment From Household Demand

Abstract

In this article, we design a non monetary demand response program to increase the share of intermittent renewable energy in the electricity production mix. We conduct a randomized field experiment over two years based on 165 households. We collect unique high-dimensional electricity data on thirty-minute household electricity consumption giving more than 6 millions observations. We introduce demand response with nonmonetary incentives coupled by a set of nudges addressing the cognitive biases that impede the optimization of electricity consumption and thus demand flexibility. Using a difference-in-differences approach, we estimate the effect of our non monetary demand response program on electricity consumption. Our results are encouraging, as demand was successfully decrease by 21 percent during the peak load event and increased by 17 percent during the peak energy production event.

JEL Classification: D9, C93, Q41