Does (Co-)ownership in renewables matter for an electricity consumer’s demand flexibility? Empirical evidence from Germany

doi:10.1016/j.erss.2018.07.009

Energy Research & Social Science

Volume 46, December 2018, Pages 169-182

https://doi.org/10.1016/j.erss.2018.07.009 Get rights and content

Highlights

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(Co-)owners of RE production facilities show differences in demand flexibility.
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Demand flexibility only occurs if (co-)owners can consume and sell energy.
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Inclination for demand flexibility was found for the usage of household appliances.
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No demand flexibility for the charging of electronical devices or electromobiles.

Abstract

Motivating consumers to adjust their electricity demand with a volatile electricity supply is an important aspect of the energy sector’s transition from fossil to renewable energy sources. (Co-)ownership in renewable energy production facilities turned out to be successful in engaging citizens to finance infrastructures and research indicates that it can also induce behavioural changes in energy consumption. Based on the results of a survey comprising of a sample of 2143 completed questionnaires collected through an online survey and analysed with propensity score matching, this paper looks at the relationship of (co-)ownership in renewable energy production facilities and demand side flexibility.

Our results show a statistically significant effect of (co-)ownership of renewable energy production facilities on the willingness of citizens to adjust their consumption behaviour to match their electricity demand to production levels. However, this relation is complex: Only when consumer (co-)owners have the choice between self-consumption and sale of the surplus electricity production to the grid, a statistically significant difference is observed. Furthermore, positive effects on flexible consumption were only found for the usage of household appliances.

Introduction

On 30 November 2016, the European Commission presented a package of measures aiming at facilitating the sustainable transition of its members’ energy sectors, reforming the design and operation of the European Union’s electricity market and keeping the European Union competitive as the clean energy transition changes global energy markets. Overall, the so-called “Clean Energy Package” includes eight legislative proposals to ensure the achievement of three main goals: putting energy efficiency first, achieving global leadership in renewable energies (RE) and providing a fair deal for consumers. Within this legislative package, the aspects of better accommodating the rising share of mostly variable renewables and empowering consumers by offering possibilities to become more active on the energy market are recurrently emphasized [1].

Both topics are also in the focus of scientific discourse. Studies on concepts of empowering citizens and engaging them to have (co-)ownership in RE instalments focus on business models, member characteristics, and/or country studies (e.g. [[2], [3], [4]]). Demand side management (DSM) and demand flexibility are analysed majorly from a techno-centric perspective, e.g. studying the impact of demand flexibility on grid stability or the use of technical devices to promote flexible consumption behaviour (e.g. [5,6]). However, the latter aspect, i.e., the techno-centric focus in strategies to promote demand flexibility, is often criticized as they include an “inflexible” consumer figuration. Hence, complementing these approaches with a social and more differentiated perspective on demand flexibility are needed [7].

Departing from these observations and the discussion on adding a social perspective to the dominant techno-centric focus in demand side management, the question arises whether (co-)ownership in RE installations as a socio-economic driver and important new development in the transition to RE can be a factor in promoting flexibility in energy consumption. The aim of this article is to link the socio-economic setting, i.e., citizens being (co-)owners of RE facilities, to the willingness of individuals to consume energy in a more flexible way, a prerequisite to adjusting their electricity consumption to given production levels. Based on data from a questionnaire among users of a real estate platform in Germany, we compare the stated willingness of (co-)owners of RE installations to adjust their demand to the stated willingness of Non-owners using the propensity score matching technique (PSM) as econometrical analysis tool. With our approach, we are in line with general calls for a social science research agenda in contemporary energy studies [8] and recent research on cultural and socio-economic factors on individual energy consumption behaviour and the way social influences connect with technical means (e.g. [9,10]).

Germany was chosen as a case study since the country takes a leading role in various domains object to our analysis. As the European Union’s largest economy Germany witnessed a dynamic development of (co-)ownership models with citizens investing both individually or collectively in RE production facilities during the active transformation of its energy sector (“Energiewende”) [11]. Furthermore, the country recently introduced regulations aiming at the promotion of demand flexibility with the so-called “Gesetz zur Digitalisierung der Energiewende” which among others requires the step-by-step introduction of smart meters in households. Accordingly, studies on measures and factors that determine electricity consumers’ demand flexibility can be either a prime example or a cautionary tale for other countries within the EU and across the globe. This is particularly the case for those countries with a comparable stage of development of their economy and comparable framework such as the UK, the USA, or the Netherlands.

Section snippets

Literature review

Against the challenges arising from the fluctuant nature of wind and solar energy several studies (e.g. [[12], [13], [14]]) highlight the importance to change behaviour of electricity consumers promoting demand flexibility to ensure system stability in the course of the energy sector’s sustainable transition. While the literature on the effectiveness of techno-centric strategies (e.g. [15,16]) and dynamic pricing schemes as a socio-economic strategy [17,18] to induce behavioural changes and

Hypotheses

In order to analyse whether the socio-economic setting of (co-)owning a RE production facility has an effect on an individual’s willingness for demand flexibility, six main hypotheses are drawn up.

The hypotheses were derived from studies analysing energy consumption patterns of individuals and demand flexibility. Accordingly, individuals have several roles when dealing with questions related to energy. Besides their role as citizens subject to energy policy measures, individuals have a

Data collection

Testing the formulated hypotheses required field research to apply a quantitative analysis. In order to generate an adequate sample and ensure easy operationalization, a standardized questionnaire was developed. The design of the questionnaire was based on qualitative exploratory data collected through a review of thematically similar research and non-structured interviews with researchers and experts from practice to avoid missing important underlying factors, a common procedure applied in

Results and hypothesis testing

The following chapter gives a detailed overview about all analysed hypotheses. A summary of the most important results can be found at the end of that chapter. For an analysis of Hypotheses 1–6, the matching technique presented in 4.4. is used. Diagnostic tests are accurate and conclusive, describing that the propensity score matching results in collectively statistical significant estimates. Additionally, the premise of common support holds true for all six specifications which is vital to

Discussion of the empirical results

A thorough analysis of decisive explanatory factors and context conditions that help to critically review our results has its starting point in the analysis of findings on energy consumption behaviour as well as social mechanisms that link (co-)ownership and electricity consumption behaviour and tries to investigate which results are particularly remarkable against the background of existing literature and whether the results of the presented study (partly) contradict existing findings in the

Conclusion

This paper investigated whether (co-)ownership of consumers in RE infrastructures has effects on their willingness to adapt their consumption behaviour, i.e., to show demand flexibility. The data showed the following results: if the end-user (co-)owns energy production facilities and has the option both, to consume and to sell the energy he produces, he is more inclined to be flexible in his energy consumption behaviour. However, this only holds for household appliances while the presented

Acknowledgments

The authors would like to thank Prof. Dr. Iraj Hashi MBE (Staffordshire University), Prof. Dr. Georg Stadtmann (Europa Universität Viadrina), and Prof. Dr. Florian Dost (Europa Universität Viadrina) for valuable comments on the methodological approach and on the manuscript in general. The authors are also grateful to Jörn Hagenguth and Hans Mörmann for their support at ImmobilienScout24.

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Original research articleDoes (Co-)ownership in renewables matter for an electricity consumer’s demand flexibility? Empirical evidence from Germany

Highlights

Abstract

Introduction

Section snippets

Literature review

Hypotheses

Data collection

Results and hypothesis testing

Discussion of the empirical results

Conclusion

Acknowledgments

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Original research article
Does (Co-)ownership in renewables matter for an electricity consumer’s demand flexibility? Empirical evidence from Germany