Dynamic pricing for residential customers: An energy justice perspective

Amidst the changes of the energy transition it has been proposed that dynamic pricing for households may have consequences for both electricity consumption and energy justice. These consequences are not well known or well studied. This paper uses a systematic literature review to explore dynamic pricing in a residential setting. The findings reveal that most of the literature, 60%, investigated fairness and equity in a system-wide, formal, technical or mathematical sense, without considering individual needs, social difference or marginalisation essential to energy justice. Where energy justice was the focus, distributional justice was most frequently studied, with research indicating that outcomes on marginalised customers remain mixed, dependent on factors including location, type of tariff and access to technology. Less often examined was recognition justice, the literature here consistently showing that recognising different needs, abilities and lived experience is essential to ensuring that inequities are not exacerbated by dynamic pricing. The incidence of procedural justice in the literature was low in comparison, however most agreed that currently there is little opportunity for customer participation in dynamic pricing and technology design and decision-making processes. Combining commonly used methods and measures observed in the technical or formal fairness and equity literature with the social factors and human-centred methods central to energy justice could significantly deepen the current understanding of the impacts of dynamic pricing on diverse customers. This understanding is vital to ensuring that the implementation of dynamic pricing does not lead to injustice or added hardship for marginalised populations.