Powering behavioural change in energy markets

A key to achieving greater energy independence and the UK's net zero target is attaining the required behavioural change from households in their energy use patterns.

A standard approach towards this is based on cost-reflective tariffs which accurately 'pass on' the cost of energy generation and supply and aim to incentivise households with 'price signals' to change their energy use patterns. Cost-reflective tariffs are often designed as if people were rational decision-makers, however, behavioural economics challenges this assumption.

This project will examine how to improve the design of cost-reflective tariffs by applying and developing new behavioural insights and evaluating the effectiveness of behavioural interventions via lab experiments. Research directions include tariffs' complexity, decision inertia, framing effects, loss aversion, and counterfactual feedback. This research will bridge the gap between theories of cost-reflective energy pricing and field experiments.