| Summary: | As the introduction of renewable energy sources increase in the power market, the need for effective use of electricity by consumers gains importance. The Swedishpower market is characterized by demand inelasticity. Thus, resulting in a system where supply follows demand. Increased demand response in electricity markets is essential in order to cope with future challenges. Electricity retailers can encourage an increased demand response by offering contracts to their customers such as “Realtime pricing” and “Fixed price with the right to return”. Under these contracts consumers are exposed to the hourly prices of electricity, thus benefitting by shifting the load to hours when the price is low. Electricity retailers benefits theoretically by risk eliminations. The aim of this paper is to quantify the economic consequences of increased demand response, for electricity retailers by offering the two contracts.This is done in two parts; firstly a simulation model of demand response is developed based on spot prices and different levels of price elasticity, secondly the results from the simulations are used in a model for calculations regarding an electricity retailers’ economy. The results show that an electricity retailers’ profit increases with increased demand response, greater response results in greater profits. Using low,medium and high demand response results in a profit increase of 34 %, 38 % and 55 % respectively. === Marknadsbaserade styrmedel i bostadssektorn
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