Dynamic pricing in consumer-centric electricity markets: A systematic review and thematic analysis

Abstract

Tariff reforms in electricity markets is becoming an area of active evaluation as efforts intensify to decarbonize electricity generation, stabilize the power grid, and maximize the welfare of electricity producers and consumers. Peaks in load profiles occur when demand is not regulated, requiring huge capacity additions, which are not utilized during off-peak periods thus undermining system efficiency. With dynamic pricing of electricity, opportunities can arise to shift demand from peak to off-peak periods and this can help to reduce the need for huge capacity additions. This paper conducts a systematic review of dynamic electricity pricing literature in order to understand the evolution of research in this growing field. 218 relevant journal papers published between 1949 and 2020 are identified from which thematic maps and ontological tables are drawn to understand key subject areas that have emerged over the years and their interlinkages. Six major thematic areas of dynamic electricity pricing research are reported including 1) pricing scheme and modeling, 2) pricing impacts, 3) user demand response, 4) consumption scheduling, 5) load scheduling technologies, and 6) cybersecurity threats and fairness issues. These six major thematic areas are then broken down into twenty second-order themes and fifty eight first-order themes. The review provides an overview of the development of the field while providing insights on its future development. It concludes that, despite coherent themes, the research on dynamic electricity pricing has enormous potential for follow-up work and theory development.