Supporting the adoption of smart grid appliances in city districts: A quantitative evaluation of policy options using agent-based modelling and scenario discovery

Supporting the adoption of smart grid appliances in city districts: A quantitative evaluation of policy options using agent-based modelling and scenario discovery

De Wildt, T.E.

Kwakkel, J.H. (mentor)

Technology, Policy and Management

Multi Actor Systems

Systems Engineering, Policy Analysis & Management

2014-07-24

Three main goals have been assigned to Dutch electricity policy: a reliable, affordable and clean electricity sector. In order to make the electricity section cleaner by decreasing GHG emissions, the SDE+ regulation has been introduced to increase the share of renewable energies in the overall electricity production. The drawback of the introduction of renewable energies is that it also makes to the electricity grid less reliable. The main reason for this increased unreliability is the incapacity of the electricity network to cope with high electricity production fluctuations. One solution to cope with high production fluctuations is to allow electricity consumers to respond to variations of electricity prices resulting from the availability of electricity on the network over time. To allow demand response, households may purchase smart grid appliances. These appliances, for example smart washing machines or smart fridges, adapt their electricity consumption depending on the price of electricity. The benefits for households is that the purchase of smart gird appliances may lead to lower electricity costs. There is however a large uncertainty about the extent to which households will be willing to purchase smart grid appliances and provide demand response. Since demand response is important to allow a wider integration of renewable energies in the Dutch electricity sector, policy measures to support adoption of smart grid appliances might be needed. To create effective policies, more insight must be gained into the factors leading to a high share of smart grid appliance adoption. The purpose of this work is to identify a set of directions for policy that allows a large adoption of smart grid appliances on the scale of city districts. The identification of directions for policy is done by using an agent-based model. This model allows simulating the decision-making performed by each individual households to decide whether to purchase smart grid appliances. In addition, it enables to incorporate the effects of interactions between households on the final adoption percentage of smart grid appliances. The analysis in this work has been performed by using the Diffusion of Innovations Theory of Rogers (1962). In this theory, (potential) adopters are assumed to be divided among five different categories: innovators, early adopters, early majority, late majority and laggards. Adopters of each category have different reasons to adopt and different roles in the diffusion of innovations. The outcomes of the model shows that the adoption of smart grid appliances by innovators and early adopters, which typically represents a small size of the population, open to change and having sufficient financial resources, is not expected to be difficult. Encouraging the formation of consumer groups, for example of the scale of city streets, and the nomination of product ambassadors may largely contribute to the adoption of smart grid appliances by households belonging to these adopter categories. Underlining the benefits of adoption for the environment and for community building is expected to offer important motivation. Model outcomes however also underline the fact that convincing early majority population, late majority population and laggards, which typically represents a large size of the population, might be extremely difficult in the case of smart grid appliances. As explained by Rogers, adopters belonging to these populations are pragmatics. Important factors influencing adoption are the amount of savings that can be made through the purchase of smart grid appliances and the easiness of their utilisation. The large-scale adoption of smart grid appliances would therefore require that the plug-and-play concept is applied to smart grid appliances. According to several studies, most households request a large amount of savings per month in order to spend more on smart grid appliances. The amount of savings that can be made in comparison to these expected is low. Therefore, the expectation is that smart grid appliances will only be adopted on large scale in case their purchase costs equals the ones of traditional appliances. The adoption of smart grid appliances does however not necessarily mean that they will be used in their ‘smart function’. Hence, the large-scale adoption of smart gird appliances does not necessarily mean that a city district is able to shift strongly its electricity demand when needed. The support of adoption by early majority population, late majority population and laggards on the scale of city districts is not expected to be effective, since the challenge mostly lies in the technological and commercial adjustment of smart grid appliances. Only when the characteristics of smart grid appliances will be interesting enough for the population categories just cited, will it become effective again to support adoption on the scale of city districts. The challenge will then become to promote a new electricity consumption behaviour. This new electricity consumption behaviour is only expected to be accepted if the changes in consumption behaviour are minimal.

Diffusion of Innovations
Scenario discovery
Agent-based modeling
Smart grid appliances

http://resolver.tudelft.nl/uuid:07b27819-1e34-4a36-848b-29858f5139be

2014-07-24

Student theses

master thesis

(c) 2014 De Wildt, T.E.