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2015-02-23 | project

Improving energy efficiency in Costa Rican households: the effect of pecuniary and non-pecuniary incentives in shaping the timing of consumption

Reducing a country´s dependence on fossil fuels is central to mitigate climate change and to promote the use of cheaper energy sources. In Costa Rica most energy is generated using hydro-electrical plants, however the fact that energy consumption is lumped in peak hours forces the use of fossil fuel (mostly diesel and bunker) based electricity generation. In this scenario, at any given day there is surplus of renewable energy at off-peak hours, and a heavy reliance on fossil fuels –more expensive and polluting– to be able to meet the consumption in peak hours. The addition of new sources of renewable energy has reached a limit, and so far public policies and energy prices do not promote incentives for a better management of electricity demand.

Our objective is to analyze the role of monetary and non-monetary incentives to reduce overall electricity consumption, and specially to promote a reduction in electricity consumption in peak hours.

The project will be implemented in an urban setting of Costa Rica. The analysis will focus on household customers of the second largest electricity company (CNFL). This provider has started a pilot project using differentiated tariffs and “hourly meters” to increase energy use efficiency, however there is no systematic impact evaluation of its effectiveness.

There are basically four types of metering devices: i. the most basic meter simply records total electricity consumption; ii. The hourly meter records electricity consumption differentiating by time of day; iii. the smart meter measures hourly consumption and reports it live to the power company; and iv. The smart meter with in-house displays provides feedback on electricity consumption to both the power company and the user.