http://dx.doi.org/10.1016/j.apenergy.2013.09.070">
 

Document Type

Journal Article

Department/Unit

Department of Economics

Title

A review of electricity product differentiation

Language

English

Abstract

This review is motivated by our recognition that an adequate and reliable electricity supply is a critical element in economic growth. From a customer's perspective, electricity has several distinct attributes: quality, reliability, time of use, consumption (kW. h) volume, maximum demand (kW), and environmental impact. A differentiated product can be formed by packaging its non-price attributes at a commensurate price. The review weaves the academic literature with examples from the real world to address two substantive questions. First, is product differentiation a meaningful concept for electricity? Second, can product differentiation improve grid operations and planning, thereby lowering the cost of delivering electricity services? Based on our analysis and comprehensive review of the extant literature, our answer is "yes" to both questions. We conclude that applying product differentiation to electricity can greatly induce end-users to more effectively and efficiently satisfy their demands upon the system, and to do so in an environmentally friendly way. © 2013 Elsevier Ltd.

Keywords

Electricity economics, Grid operations and planning, Product differentiation

Publication Date

2014

Source Publication Title

Applied Energy

Volume

114

Start Page

262

End Page

272

Publisher

Elsevier

ISSN (print)

03062619

This document is currently not available here.

Share

COinS