Institution of incentive-based demand response programs and prospective policy assessments for a subsidized electricity market

Abstract

Owing to countless advancements in information technology, all residential consumers, in any part of the world, are empowered to contribute to demand response (DR) programs, to manage their electricity usage and to cut associated expenses using a suitable energy management system. Solutions based on consumer participation in meeting the growing electricity demand are carried out through different programs, and incentive-based demand response (IBDR) programs play an important role in these circumstances. However, introducing such programs to any new market needs consumers' willingness along with a good policy support. This study assesses the willingness and interest of consumers to participate in different IBDR programs and the associated need for developing policies, based on the consumers’ feedback, in a subsidized electricity market such as that of Kuwait. A survey was conducted to get feedback from consumers on three different IBDR programs and four incentive schemes.After establishing the association between incentivization and load reduction, and identifying consumers’ choice on the most preferred IBDR programs and incentive schemes, the results were used to assess the need for different policy strategies for a typical subsidized market. The results of this study can be taken as a reference for formulating policies and programs for similar markets. The analysis on the impact of the programs indicates that by implementing IBDR programs, in addition to the financial benefit to both consumers and implementer, Kuwait can maintain its reserve capacity without any further addition of power plants.