The European Union aims to achieve climate neutrality by 2050, requiring large-scale electrification and increased reliance on renewable energy sources. This transition places growing stress on national power grids, including in the Netherlands, where grid congestion is most severe during peak hours, leaving significant off-peak capacity underutilized. While grid expansion offers a direct solution, it is costly and does not address the imbalance between peak and off-peak loads. Shifting consumption away from peak hours would improve grid efficiency and reduce the need for long-term infrastructure investments. Dynamic electricity pricing is considered a promising tool to stimulate such demand flexibility by providing households with financial incentives to reduce or shift consumption during expensive peak periods.

This thesis investigates the impact of dynamic electricity prices on residential consumption patterns using hourly electricity consumption and price data from 813 Norwegian households. Norway provides a valuable context due to its advanced energy transition, characterized by high adoption of dynamic contracts (≈75%) and electrification levels (≈84%). The central research question is: How do dynamic electricity prices influence intra-day electricity consumption patterns among residential consumers? We focus on the extent to which households reduce or shift demand in response to price changes, and on the moderating role of household characteristics and enabling technologies.

We exploit the natural experiment created by the 2021 winter price shock, comparing household consumption during this period to the preceding winter. Two econometric models are employed. The first examines the overall impact of dynamic pricing during the price shock. The second explores intra-day responsiveness by testing how households adjust demand to hourly price variation across days, while controlling for household habits and common shocks such as weather. We further conduct subgroup analyses to explore heterogeneity in responsiveness.
The results indicate that households with dynamic contracts reduced consumption more than those with fixed contracts during the 2021 price shock. A 1 NOK price increase had a stronger effect in the shock period compared to the previous winter. Intra-day responsiveness was concentrated in peak hours, with an average consumption reduction of 3.3%. Subgroup analysis highlights the role of enabling technology: households owning electric vehicles (EVs), particularly with smart-charging systems, showed greater peak-hour reductions and clear evidence of shifting load to cheaper off-peak hours.

From a policy perspective, these findings suggest that dynamic contracts incentivize demand-side flexibility, though effects remain modest. Time-of-Use contracts may provide sufficient incentives for most households, given their predictability, while real-time pricing contracts hold greater long-term potential, especially alongside enabling technologies. Encouraging adoption of dynamic contracts and supporting complementary technologies could enhance household responsiveness, contributing meaningfully to grid efficiency.