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Léautier, Thomas-Olivier
(2012)
Is mandating "smart meters" smart?
TSE Working Paper, n. 12-341
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Abstract
The advent of "smart meters" will make possible Real Time Pricing of electricity: customers
will face and react to wholesale spot prices, thus consumption of electric power will be aligned
with its opportunity cost. This article determines the marginal value of a fraction of demand (or
a consumer) switching to Real Time Pricing. First, it derives this marginal value for a simple yet
realistic specification of demand. Second, using data from the French power market, it estimates
that, for the vast majority of residential customers whose peak demand is lower than 6 kV A, the
net surplus from switching to Real Time Pricing is lower than 1 euro/year for low demand elasticity,
4 euros/year for high demand elasticity. This finding casts a doubt on the economic value of rolling
out smart meters to all residential customers, for both policy makers and power suppliers.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | 8 October 2012 |
| Uncontrolled Keywords: | electric power markets, demand response, smart grid |
| JEL Classification: | D61 - Allocative Efficiency; Cost-Benefit Analysis L11 - Production, Pricing, and Market Structure; Size Distribution of Firms L94 - Electric Utilities |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 09 Jul 2014 17:29 |
| Last Modified: | 02 Apr 2021 15:47 |
| OAI Identifier: | oai:tse-fr.eu:26343 |
| URI: | https://publications.ut-capitole.fr/id/eprint/15404 |
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