Behavioural Insights and Demand Management in the Energy Sector

Project dates: 2023 - 2024

The energy sector is currently undergoing an unprecedented transformation that is seeing large-scale fossil fuel generation being replaced with smarter, smaller-scale widely distributed energy resources. While this new model is imperative to long-term energy and environmental sustainability it brings with it several challenges including grid instability and high pricing during peak demand periods. The transition to clean energy will be slow without significant sector change.

Demand-side management (DSM) is one solution to this problem. DSM encompasses several strategies that aim to modify household energy demand. These strategies range from alerting households when their energy consumption is high to energy companies having the ability to curtail specific household appliances during periods of peak demand. Therefore DSM requires energy companies to have some degree of visibility and/or control of household’s real-time energy consumption.

The highly politicized and fragmented nature of the energy sector combined with a lack of consumer-centric approaches, supply issues and rising prices has meant that consumer trust in the energy actors responsible for DSM is at an all-time low (Edelman, 2023; Savage, 2022; Schönauer & Glanz, 2020). Energy actors are therefore questioning whether they have sufficient social license from consumers for DSM initiatives and a willingness to provide energy organisations with the visibility and/or control they need for DSM programs to be successful. Evidence is therefore needed on consumers’ thoughts, beliefs, and preferences for DSM programs and how these preferences might differ between households.

This project, therefore, aims to address the following questions:

  1. How willing are households to sign-up for DSM programs?
  2. How much social licence do electricity companies have to obtain visibility and control of household energy consumption?
  3. How do household demographics and decision-making style impact DSM preferences?
  4. Does the value framing of DSM communication impact willingness to adopt DSM?

Why is this important?

The future of energy relies on consumers being willing to play an increasingly active role by adopting new energy technology that allows them to produce and manage their own electricity. However, a lack of consumer-centric approaches in the sector combined with negative perceptions of energy actors means that many consumers are wary about accepting their new role.

Therefore to accelerate the transition to clean energy, policymakers and energy organisations must adopt a shared value mindset that puts consumer preferences and values at the centre of technology and program development. Gaining this knowledge will allow energy policymakers and energy organisations to develop customer-supported DSM programs that have the power to help stabilise the grid and ensure energy security into the future.

What we did

This research involved a literature review followed by a national survey of 612 Australian consumers. The project produced a report that synthesised the results and put forward recommendations to policymakers and energy organisations about how to best implement DSM programs.

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Chief Investigators


Other Team Members

Matt Newey (Essential Energy)