Institution of incentive-based demand response programs and prospective policy assessments for a subsidized electricity market

Renewable and Sustainable Energy Reviews 117 (2020) 109490

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Institution of incentive-based demand response programs and prospective policy assessments for a subsidized electricity market Rajeev Alasseri a, b, *, T. Joji Rao a, K.J. Sreekanth b a b

School of Business, University of Petroleum and Energy Studies, Dehradun, 248007, India Kuwait Institute for Scientific Research, P.B. No. 24885, Safat, 13109, Kuwait

A R T I C L E I N F O

A B S T R A C T

Keywords: Demand response Consumer survey analysis Subsidized electricity Policy formulation

Owing to countless advancements in information technology, all residential consumers, in any part of the world, are empowered to contribute to demand response (DR) programs, to manage their electricity usage and to cut associated expenses using a suitable energy management system. Solutions based on consumer participation in meeting the growing electricity demand are carried out through different programs, and incentive-based demand response (IBDR) programs play an important role in these circumstances. However, introducing such programs to any new market needs consumers’ willingness along with a good policy support. This study assesses the will­ ingness and interest of consumers to participate in different IBDR programs and the associated need for devel­ oping policies, based on the consumers’ feedback, in a subsidized electricity market such as that of Kuwait. A survey was conducted to get feedback from consumers on three different IBDR programs and four incentive schemes. After establishing the association between incentivization and load reduction, and identifying consumers’ choice on the most preferred IBDR programs and incentive schemes, the results were used to assess the need for different policy strategies for a typical subsidized market. The results of this study can be taken as a reference for formulating policies and programs for similar markets. The analysis on the impact of the programs indicates that by implementing IBDR programs, in addition to the financial benefit to both consumers and implementer, Kuwait can maintain its reserve capacity without any further addition of power plants.

1. Introduction Motivating consumers to use electricity efficiently as part of the energy conservation program has been one of the greatest challenges to utility providers for a long time. Motivation is nothing but an urge in a person to perform the goal-oriented behavior, which can be categorized into intrinsic and extrinsic motivations. Intrinsic motivation refers to doing some action, which is interesting and gives pleasure. On the other hand, extrinsic motivation is related to performing some action due to some external influence [1]. Extrinsic motivation has different forms, and incentivization is found to be one of the most widely used methods extrinsically motivating consumers in various markets. In this study, the focus was given on the role of motivating consumers through incentiv­ ization to achieve a reduction in power usage in a subsidized electricity market. According to the latest studies, between 2040 and 2050, Asia will surpass the combined power demand of North America and Europe. This

prediction was made based on the data on the gross domestic product, population, military expenses, education, health, governance, and technological investment. Emerging economies in Asia, such as India, China, and countries in the Middle East, are making substantial in­ vestments in infrastructure development, which demands a lot of elec­ tricity [2]. Globally, the major users of energy are residential, commercial, industrial, agriculture, and transportation sectors. How­ ever, the energy usage pattern of these users has been so far mostly irrepressible and inflexible with respect to the generation and distribu­ tion systems. 1.1. Background Studies suggest that with the proper implementation of demand-side management (DSM) strategies in the residential sector, a significant amount of electricity can be saved [3], and one of the DSM categories named demand response (DR) programs concentrate on this sector. DR is widely implemented through IBDR programs in which consumers are

* Corresponding author. School of Business, University of Petroleum and Energy Studies, Dehradun, 248007, India. E-mail address: [email protected] (R. Alasseri). https://doi.org/10.1016/j.rser.2019.109490 Received 27 September 2018; Received in revised form 9 October 2019; Accepted 10 October 2019 1364-0321/© 2019 Elsevier Ltd. All rights reserved.

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List of abbreviations Alr MI Amc NMI CP PL CRF Ppc CVR QBP DBBB Rc DLC RCSL DR

RE DSM Rpl EC Rtf IBDR SDASP

average expected load reduction monetary incentive average monthly consumption nonmonetary incentive credit point peak load cash refund percentage of participating consumers content validity ratio quick bidding program demand bidding and buyback reduction in consumption direct load control remote controlling of selected load demand response

IL SPSS LDSR Sr Mc SSC MEW SVP

incentivized for reducing their electricity consumption. Depending upon the policy, the compensation varies according to the time and quantity of power reduction. The most popular IBDR programs suitable for the residential sector are direct load control (DLC), interruptible load (IL), and demand bidding and buyback (DBBB) programs [4]. Based on the programs, many utility companies launch various programs with different commercial names, to attract consumers. During a DLC event, the power supply for selected loads needs to be disconnected by either the utility provider or the consumer. Depending on the control system used, it can be controlled locally or remotely. IL demands quick power reduction, without any prior notice. Irrespective of this behavior, many industrial consumers find IL to be acceptable [5]. In DBBB, consumers are contacted on a daily basis to meet the load reduction target by of­ fering an appropriate cash refund. As the name suggests, the utility providers literally buy back the unused electricity from the users through a bidding process. An overview of different DR programs and their theoretical back­ ground was provided by Ref. [6] and their presence in various countries was detailed by Ref. [7]. A lot of studies are being conducted in the field of DR in different categories, which include smart appliances [8], energy management systems [9–11], smart grids [12–17], load shifting [18], comfort optimization [19], power quality [20], demand aggregation [21], integration of RE [22–24], pricing [25–30], energy storage [31–34], contracts [35,36], risk management [33,37–39] etc. The implementation of any DR strategy needs to be supported by proper policies and, nowadays, many researchers focus on policy related studies in DR. All of the policies need to be regularly updated to include the latest changes in the socioeconomic developments. In the Indian context [40], explained the changes in different policies in The Elec­ tricity Act, 2003, and its amendment in 2014. In another study [41], studied the possibilities of transferring DSM policies among different countries using various methods, such as direct copying, adaptation, and inspiration, and identified four groups of countries where policy transfer is feasible. Studies focusing on subsidy policies were also conducted worldwide by different researchers. In China, there are two types of policy in­ centives to promote energy efficiency, namely, efficiency standards, and labeling schemes and subsidy incentives [42]. At the same time [43], feel that the subsidies should not negatively impact producers to in­ crease their production resulting in considerable resource wastage. This argument is supported by Ref. [44] insisting the need for a policy for transferring the part of subsidy given to buying new-energy vehicles to research and development. Further to that [45], identified the funding of research and development as the most powerful weapon for reducing electricity consumption. In many countries, electricity is subsidized, and

renewable energy demand-side management reduction in peak load electricity conservation reduction in a time frame incentive-based demand response special discount for energy efficient appliances and solar panels interruptible load Statistical Package for the Social Sciences lottery draw and special recognition share of residential sector in load monthly consumption special service counter Ministry of Electricity and Water summer vacation program

it is obvious that any reduction in subsidies can help improve the country’s economy [46]. However, it will have an adverse effect on the household [47]. The above fact forces the policymakers to consider alternate options for optimizing the usage, by supporting subsidies based on the output compared to fixed subsidies [48]. To support elec­ tricity conservation (EC) strategies, a capital grant and feed-in tariff based incentive policy were suggested by Ref. [49] for promoting RE, but the installation of solar panels were found to be challenging in the residential sector due to many barriers [50]. The referred literature on implementation strategies and experiences of DR programs in different parts of the world covers mainly electricity markets where real-time pricing is followed. No comprehensive study could be found, which details the policy requirements for IBDR imple­ mentation in the electricity market, where electricity is given to con­ sumers at a subsidized rate. Previous studies emphasize that the reaction of consumers in the residential sector has a high influence on energy planning [51], and consumers’ willingness plays an important role in implementing IBDR programs. 1.2. Objectives of the study The limited presence of DR programs in subsidized electricity mar­ kets motivated authors to check the willingness of the consumers for enrolling in such programs in a subsidized electricity market and iden­ tify the need for policies for implementing such programs. As pricebased DR programs have no significance in the subsidized market, the following research objectives were formulated for this study: � To assess the willingness and interest of consumers in a subsidized market to participate in different IBDR programs having multiple incentive options. � To identify the need for necessary policies for implementing IBDR strategies in a subsidized market. The novelty of this study can be indicated in two ways. First of all, this study recognizes consumers’ preference towards IBDR programs and incentive schemes in a subsidized market. Secondly, it ascertains the need for different policies, for introducing IBDR programs in a subsi­ dized market. As these characteristics were not covered in the referred literature, the results of the study will be beneficial to policymakers. Kuwait’s residential sector was selected for analyzing the acceptance of IBDR programs among consumers in a subsidized electricity market, as electricity is highly subsidized in Kuwait. From the referred literature, it was learned that introducing IBDR programs to any market was challenging due to their dependency on consumers’ acceptance. Before 2

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any implementation, proper policies had to be developed, which can motivate consumers to participate in such programs. By keeping the abovementioned factors in mind, a methodology was designed for assessing the willingness and interest of consumers to participate in different IBDR programs. This will help in identifying the need for pol­ icies to attract consumers in Kuwait’s residential sector, which is an excellent example of a subsidized electricity market. Since Kuwait holds the seventh position among countries having the highest per capita electricity consumption in the world [52] and is also a part of the Asian countries whose power demand is expected to increase drastically, this study has high significance.

Even though the term “policy” is used in various contexts in different ways, it varies from country to country, institution to institution, and even unit to unit. A policy that is practiced in one place may not be suitable to other places due to change in principle, authority, resources, etc. [64]. To find out the suitability of the proposed programs and their policy requirements in Kuwait, an abridged study was conducted on the pol­ icies available in Kuwait with regard to the energy sector. The formulation and implementation of suitable energy policies for the State of Kuwait started way back in the 1980s, by identifying the need for an energy conservation code. Minimum energy efficiency pre­ requisites for different types of buildings have been imposed in various buildings since 1983 by the MEW through the energy conservation code of practice. In addition, to giving the minimum specification for major building systems, such as air-conditioning, walls, and roofs, insulation, and glazing, the code restricts the power requirement of air-conditioning and lighting systems per unit floor area [65]. This code was renewed along with the technological advancement in the country, and Kuwait currently follows MEW/R-6/2014 version [66]. In Kuwait, desalinated water, which is a by-product of power plants, is used for domestic requirements, which facilitates the working of both sectors under one umbrella of MEW. In a study to forecast the electricity and water demand for 2030 [61], briefly touched upon the status quo of Kuwait in terms of the policy factor, conservation. Accordingly, it was pointed out that incentivization is minor in development of energy-saving technologies. It also commended on the absence of a plan for increasing the tariff and the decision on not forcing the residents to follow conservation measures. The Second Development Plan 2015–2020 (DP15-20), which com­ prises all the recent policies prepared with a focus of transforming Kuwait into a financial and commercial center by 2035, elaborate on updated policies for various sectors but do not emphasize on sustainable energy development [54]. Some of the focus areas are the capacity expansion of power plants to ensure energy security, expansion of transmission networks, the involvement of the private sector in the ownership and management, etc. However, the conservation programs mentioned in the general planning outline of DP15-20 emphasize on some of the vital areas such as reforming the present subsidy program; restructuring electricity sector by introducing private sector; limiting the role of the government to planning, regulating, and monitoring; improving building efficiency; and resolving environmental issues [54]. Various scholars conducted several studies on emerging technologies and presented their recommendations for future considerations. Some of them include carbon mitigation plan for petroleum industry [67], uti­ lization of renewable technology for power generation [68], job creation [69], diversification of primary energy mix and energy demand man­ agement measures [70], national energy efficiency policy [71], national energy retrofit program [65], etc.

1.3. Kuwait’s electricity sector The government-owned utility agency, the Ministry of Electricity and Water (MEW) is the sole provider of electricity to entire Kuwait. Presently, MEW meets the growing demand for electricity by adding new power plants. According to the latest statistical report of MEW, the installed capacity of Kuwait is 18743 MW against the peak power de­ mand of 13800 MW [53]. Kuwait’s electrical grid is currently connected to the Gulf Coopera­ tion Council’s (GCC’s) grid for power stability, which is expected to be expanded for commercial electricity trading. The infrastructure in the grid is developing as per a long-term plan, which focuses on the easy connectivity of renewable energy (RE) sources and upgrading to a smart grid [54]. Smart grids will open the door for adopting different tech­ nologies, such as “grid to vehicle” and “vehicle to grid” concepts, where residential consumers can participate [55]. The residential sector is the major consumer of electricity in Kuwait. It consumes around 69% of the total electricity produced in the country [56]. Air-conditioning accounts about 70% of residential consumption [57]. MEW does not record consumptions and produce bills for resi­ dential consumers every month. Residential consumers are charged around 6% of the actual price, which is KD0.002 (USD0.007), and the government manages the rest. Electricity tariff for industrial application is half of that of the residential sector (USD0.0035). This practice was followed for a long time [54,58]. Per capita electricity subsidy in Kuwait is the second highest among other countries in the world [59]. This subsidized electricity price is identified as one of the reasons behind the country’s high rank in the index of per capita electricity consumption [58,60,61]. In recent years, Kuwait’s electricity sector focuses more on RE for power generation. It targets 10% of its total generation from RE by 2020 and 15% by 2030. By the commissioning of Shagaya Energy Park, which consists mainly of power from solar and wind energy, authorities believe that the abovementioned target can be achieved [62], paving the way for reduction in Kuwait’s fossil fuel consumption by 44% in reference to 2015 as well as an increase in solar energy harvest by 11.6% [54]. Oil industry is the largest industry in Kuwait, accounting for more than half of Kuwait’s GDP. Kuwait’s oil reserve is the fourth largest in the world and it accounts for 7% of worldwide oil production. Since the government owns the entire oil industry, it controls the economy and hence the energy utilization in Kuwait. Presently, the government of Kuwait is going ahead by keeping the following characteristics in its direction. “Meet Kuwait’s current and future energy demand (natural gas, crude oil, and petroleum products) by providing appropriate and optimal economic and environmental fuel as well as strategic back-up in accordance with required specifications” [63]. At the same time, Kuwait practices various DSM programs to opti­ mize electricity usage in various sectors [58]. Incentivizing individuals for getting the work done can be witnessed in many situations. Its presence is diversified from appreciating a child for doing homework to giving promotion to an outstanding employee. Likewise, incentivization is practiced in many electricity markets also, as part of DSM, in the form of incentive-based demand response (IBDR) programs. The incentiv­ ization mentioned above generally follows certain policies or guidelines.

2. Preliminary analysis based on literature review and experts’ interviews In order to check the acceptability of the IBDR programs among the residential consumers of Kuwait, it was decided to develop and present different IBDR programs to the consumers in an easy, understandable way. Document analysis, a well-known qualitative data analysis method­ ology is used by researchers to frame various programs and incentive schemes [72]. It is obvious that the results will have conflicting solutions due to the different demographic influences. To overcome this defi­ ciency, mapping the collected data with market-specific information collected from experts is adopted by researchers [73]. A similar type of data analysis for acquiring required information regarding incentivizing consumers in a subsidized market was carried out in this study. As part of the document analysis, after strict scrutiny, 235 relevant documents were selected. By using renowned qualitative data analysis software, 3

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ATLAS. ti [74], the results of the document analysis was used to prepare interview questions for conducting semi-structured interviews. A total of six experts were interviewed for this purpose, who have good academic, research, and hands-on experience in the subsidized electricity market of Kuwait. The different steps of document and interview analyses are shown in Fig. 1. The use of ATLAS. ti software in both document and interview an­ alyses is almost similar. The major difference is the type of documents used. In document analysis, different articles, such as government re­ ports, research papers, websites, company reports, etc., were used as primary documents, while the transcripts prepared based on the inter­ view recordings were used as primary documents in interview analysis. Coding is the most important step in both analyses. The code represents ideas, themes, and concepts available in the referred document, which are relevant and related to the study [4,74]. These identified codes were reduced into a sizable number by merging similar codes or by replacing several codes with a common code. Later, relationships were established between these codes which helped identify the most influential codes. Based on these codes and to match with the objective of the analysis, inferences were made. In the case of document analysis, the focus was given to find out various IBDR programs practiced worldwide, their strengths and weaknesses, applicability to Kuwait’s market, etc., to formulate questions for experts’ interviews. As an example, a question

“Which are the sectors to be considered for DR programs in Kuwait?” was formulated based on one of the major identified code “sectors for implementation”. Similarly, during the interview analysis, importance was given to design IBDR programs suitable for Kuwait and the possibility of getting the acceptance of consumers. Among the final code list, three important codes gave an exact direction to the type of programs suitable for Kuwait. According to these codes, some consumers may be interested in preplanned programs with adequate controls. Another group of con­ sumers may be interested in quick response type programs, while the third group may be more interested in getting involved in programs when residents are away during summer. The next step was establishing a relationship between various finalized codes, and based on the re­ lationships developed between codes themselves and to the main cate­ gory, three entirely different programs were formulated to attract consumers of various interests. Features of the suggested programs are given in Table 1. 2.1. Proposed programs and features As planned, the output of document and interview analyses was used to formulate three different IBDR programs, which are suitable to be implemented in Kuwait’s subsidized electricity market (Table 1). Table 1 Features of the proposed IBDR programs.

Fig. 1. Steps for document and interview analyses. 4

Name of the program

Time Frame

Type

Features

Remotely controlling selected load (RCSL) for the agreed time period

Early morning (04:00–06:00) Morning hours (06:00–8:00) Office hours (8:00–13:00) Peak hours (13:00–17:00) Evening hours (17:00–22:00) and night (22:00–04:00)

Direct Load Control (DLC)

Summer vacation program (SVP)

Up to 50% of vacation time, 51–90% of the vacation time, 91% and above the vacation time

Direct Load Control (DLC)

Quick bidding program (QBP)

Early morning (04:00–06:00) Morning hours (06:00–8:00) Office hours (8:00–13:00) Peak hours (13:00–17:00) Evening hours (17:00–22:00) and night (22:00–04:00)

Demand Bidding/ Buyback (DBBB)

The electrical loads in the consumer’s house will be remotely controlled based on the load and period agreed by the consumer. Special control devices will be installed for this purpose. With the help of these, AC units and other electrical appliances can be switched off totally and/or set points of AC units can be varied according to the consumer’s occupancy pattern. Consumers to ensure the promised load reduction in their own way. This program is designed for summer season (June to September) only On their website, utility companies will display their targeted load for reduction with time frame. Consumers can quote their capability to load reduction for the different time frame. Consumers to ensure the promised power reduction

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Credit points (CP): Based on amount and time of reduction of electricity consumption, CPs will be added to consumers account Nonmonetary

3. Methodology

Table 2 Details of the proposed incentive schemes.

As the objectives of the study focus on the assessment of consumers’ willingness to join IBDR programs and the formulation of policies to motivate consumers to take part in EC programs in a residential subsi­ dized electricity market, an exploratory research was planned, which is widely used to test concepts before they are put into practice [75]. The methodology adopted for this study has two parts. In the first part, consumers’ interest towards the suggested programs was collected through a survey questionnaire and results were analyzed. Based on the feedback received from consumers, need analysis for policies was car­ ried out in the second part. Methodologies adopted for these parts are detailed in the following sections. 3.1. Survey analysis The motive behind conducting the survey was to assess the influence of incentivization on EC among consumers. The data required for this study were collected using a survey research method, which involved 5

The accumulated credit points can be redeemed for availing the following special privileges. a) Special service counters b) Lottery draw and special recognition c) Discount for energy efficient appliances and solar panels

Cash refund (CRF) Monetary

RCSL

Method

The results obtained in the form of programs and incentives were used to collect consumers’ response. The detailed methodology is pre­ sented in the following section.

Incentives

Programs

SVP

QBP

a) Special service counters (SSC): Most of the residents in the country need to visit governmental offices for various reasons. To save the waiting time, some exclusive windows can be reserved. Consumers may redeem some of the accumulated CPs in return for the quick service. Depending on the necessity and demand, this facility can be extended to some other areas like the airport as well. Since this in­ volves the appropriate integration of different departments, a lot of preparation and coordination are required. b) Lottery draw and special recognition (LDSR): Most of the banks in Kuwait follow lottery draw based strategies to attract consumers. Experts feel that by introducing such schemes, a lot of consumers can be attracted. However, more studies should be conducted on calcu­ lating the prize value, and the CPs required for entering the draw. Special recognition by the government authorities can also be planned for the consumers who reach a particular milestone of CPs. c) Special discount for energy efficient appliances and solar panels (SDASP): Due to the subsidized pricing and the unrestricted avail­ ability of cheap-priced low-quality electrical appliances, consumers are influenced to buy cheap products for saving money, which in­ crease the power consumption. To control such unhealthy practices, giving subsidy for high-quality products can be considered. Linking such subsidies with the CPs that consumers gained as part of their contribution to IBDR programs will create a win-win situation for both the implementer and the consumers. The discount can be extended to solar panels also.

For reduction of each kWh receive 10 fils for the entire implementation period

For motivating consumers to join the programs, as a reward, both monetary (MI) and nonmonetary incentive (NMI) schemes are proposed. MI is nothing but cash refund (CRF). This amount will be calculated based on the contract between the implementer and the consumer. Many parameters, such as the time of reduction, quantity, production and transmission cost, type of control used, etc., will influence the calcula­ tion of CRF. The details of the incentive schemes and their role in different programs are summarised in Table 2. One of the outputs of the interview analysis was related to con­ sumers’ interests in non-cash-based incentives. Accordingly, different NMIs were included in the program as incentives. To account for the savings more effectively, credit points (CP), which is a different way of representing CRF, is designed. The possible usage of the CP, accumu­ lated as NMI, and its relevance are given subsequently:

For reduction of each kWh receive 15 fils between 13:00 to 15:00 h (peak hours) and 10 fils for other time period

2.2. Proposed incentive schemes

Price decided by implementer (PDI): Depending upon the bids, implementer will decide the price and will inform the consumers. The consumers can accept or deny. Price demanded by the consumer (PDC): Along with the bid, consumers demand their expected price for load reduction. The implementer can accept or deny. Not applicable

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the distribution of a structured questionnaire to respondents for eliciting the information required for making a satisfactory conclusion [76,77]. An exploratory research scheme based on random sampling was devel­ oped to collect data from all governorates of Kuwait. The population of the sample included consumers residing in different types of buildings in the different governorates of Kuwait. Hence, the source of data is the responses from residential consumers, which is the primary data in na­ ture. Sampling size, “n”, was calculated based on the subsequent for­ mula [78]: n¼

N

the consumers. Following that, different programs and incentive schemes were introduced to consumers to register their interest in participating in such programs (questions 14 to 26, except 18). Finally, through the questions in the general feedback section (questions 27 to 30), an attempt was made to collect consumers’ overall view about different programs and incentive schemes. To collect the data on the varying interests of consumers with time, the time frames for remote controlling of selected load (RCSL) and quick bidding program (QBP) were divided into six, which corresponded to different activity hours of the day. At the same time, the time frame for SVP was prepared to cover a different percentage of the total vacation time. The details of different programs are presented in the results and discussions section.

(1)

1 þ NðeÞ2

where “N” is the total population and “e” is the confidence level. While substituting the values, N as 4480000 [79] and “e” as 0.05 (for 95% confidence level), “n” becomes as 400. A 95% confidence level is widely accepted in all social science related studies [80]. The following analytical methods were planned to test the results.

3.2. Need identification of policies Policy formulation requires proper inputs in the form of willingness and implementation capabilities [84]. In this study, consumers’ will­ ingness and their preferences were taken as the input for assessing the need for policies. Accordingly, the gap in the available policies was identified, and new policy requirements were proposed.

� Chi-Square test to check the association between consumers’ will­ ingness to participate in different programs and targeted load reduction. � Mann-Whitney U test to compare the participants’ willingness based on two groups, “not interested” and “interested” in load reduction. � McNemar’s Chi-square test to check the association between different incentives offered to consumers and their willingness to join in the programs. � Frequency distribution to check the most preferred incentive scheme based on the preference of participants. � Frequency distribution to evaluate the most preferred program based on the preference of participants.

4. Results and discussions In line with the methodology, results are also detailed in two parts. In the first part, the entire process of survey analysis, including the prep­ aration of questionnaire, data collection, and different analyses, is pre­ sented. In the second part, the policy-related observations churned out from the preliminary analysis and survey analysis are presented. 4.1. Results of survey analysis

To collect the information required to conduct the abovementioned analyses, a detailed questionnaire was prepared and arranged under four broad areas. The details of each category are presented in Table 3. By considering the nature of participants, the questions were presented in both English and Arabic. Even though different administration methods can be used for collecting the responses [81] from the con­ sumers, by considering the technological development in the country [82], Internet-based online survey method, namely, Survey Monkey software, was utilized [83]. Questions 1 to 13 intended to collect the demographic information of

In this study, Statistical Package for the Social Sciences (SPSS) version 21 was used for data analysis [85]. 4.1.1. Quality assurance of collected data To improve the questions, formats, and scales in the questionnaire, a pilot testing was carried out [86]. The questionnaire was pretested with 25 professionals, including energy experts, statisticians, and academi­ cians. The feedback was found to be helpful in making the questionnaire more concise and specific for the desired objective. The pilot testing not only helped in rectifying some of the weaknesses of the questionnaire but also helped in establishing the content validity of the questionnaire. The revised final questionnaire is given in Appendix A1. As the minimum required responses were 400, the questionnaire was circulated among more than a thousand people to get their feedback. By the end of a month-long campaign, the researchers managed to get a total of 914 responses, out of which 519 responses were found to be complete. Among the completed responses, 155 were from Kuwaiti na­ tionals. This is a genuine representation of the Kuwaiti population, which constitutes 30% of the total population of the country. Data on the country-wise participation of expatriates was not included in this study. As the first step, all data were fed into the SPSS software based on their type. The details of the different types of questions and their nu­ merical representation are listed in Appendix A2a and A2b, respectively. After feeding the data into SPSS, an exploratory data analysis was carried out. The fundamental aim of conducting such an analysis was to identify the outliers, which can influence the proposed analysis [87]. Bivariate linear regression was carried out for each time frame (for different programs and incentive schemes) by keeping user willingness as the independent variable and load reduction as the dependent vari­ able. All of the cases above the standardized residual value of 3 and below 3 were considered as outliers and were taken out from the data [85]. After the cleanup of the data, a total of 448 responses were selected for further analysis. These data also represented the Kuwaiti and non-Kuwaiti ratio of 30% and 70%.

Table 3 Details of the questionnaire. Section No.

Heading

Contents

No of questions

1

Introduction

Nil

2

General information

3

Program-1 Program-2 Program-3

4

General feedback

A detailed description of background, aim, confidentiality, etc. detailed here. Different demographic information such as age, nationality, type of building, the location of house, income, etc. was asked to enter. Data format: dichotomous, open-ended, multiple-choice After detailing the highlights of the program, participant’s interest to participate in the program and their proposed load reduction potential under two different incentive schemes were asked to enter. Data format: Likert Scale Along with general feedback on the proposed programs, the most preferred program and incentive schemes were asked to enter. Data format: dichotomous, open-ended, Likert Scale

13

4 5 4

4

6

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The validity of the data is crucial in the survey method of data collection. This represents whether an inference can be drawn from the collected data or not [86]. Face validity [88], and content validity were carried out and the content validity ratio (CVR) was found to be in the range of 0.622–0.99, which can be accepted. Based on this, all of the questions were found to be “essential” [89]. The reliability was tested using Cronbach’s alpha method [90]. This test was carried out in SPSS as a scale reliability test, and the overall Cronbach’s alpha was found to be 0.893, which can be interpreted as “highly reliable” [75].

During the data collection process, extreme care was taken to keep a balance in the demographic characteristics of the population. From the results shown in Fig. 2, it is evident that the demographics of the collected data truly represent different categories of the population. For example, nationality data accounts for a ratio of 30:70, which is the actual ratio of Kuwaiti and non-Kuwaiti population. Similarly, it can be observed that the collected data represent all the leading professions in Kuwait, age groups, houses in different governorates, type of various dwellings, and the total family income. As the further analyses, such as hypothesis test, Mann-Whitney U

Fig. 2. Demographic statistics of the collected data. 7

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test, and McNemar Chi-Square tests, dealt with two categories of con­ sumer willingness derived from questions 14, 6, 19, 21, 23, and 25, the responses from these questions were clubbed together to formulate two groups, namely, “interested” and “not interested”. The responses “not interested” and “not at all interested” were clubbed together to form a single group “not interested”. Similarly, “interested” and “highly interested” were clubbed together to form another group, “interested” [88]. The responses of “not sure” were excluded from the analysis, as it represented a neutral view, neither positive nor negative.

The results of the Mann-Whitney test are summarised in Appendix A3b. From the results, it is clear that the load reduction scores are not equal for the two groups. As an example, for the time frame of 04:00 to 06:00 h (program RCSL and incentive scheme CRF), the mean rank of “interested” group is 219.7, which is higher than the mean rank of “not interested” group, which is only 109.6. The Asymptotic Significance (2sided) values for a confidence level of 95% were found to be zero (p < 0.05). Since there was a significant difference between the two groups regarding their mean rank and the Asymptotic Significance (2sided) values were always zero, the null hypothesis was rejected, and the alternative hypothesis was accepted. From these results, it can be further claimed that irrespective of the subsidized pricing, consumers can be motivated to join the EC programs. From the Chi-Square test and Mann-Whitney test, it was concluded that the majority of the consumers were interested in the proposed IBDR programs, and load reduction could be achieved by giving appropriate incentives. However, it was not clear whether their interest will change with the change in the incentive schemes. The following test was intended to clarify this uncertainty.

4.1.2. Hypothesis test A Chi-Square test is a statistical test frequently used in social sciences to check the hypothesis. In this nonparametric test, no assumption needs to be made about the form of the original population distribution from where the samples are extracted. The Chi-Square test is based on a null hypothesis, which is the guess that two observed populations have no relationship, and compares expected-outcome frequencies with observed frequencies to find the distribution of variables if the two are unrelated [91]. By using the cross tabulation in SPSS, Chi-square test was carried out to check the following hypothesis.

4.1.4. Change in the consumers’ interest regarding the monetary and nonmonetary incentives To check the impact of the change in incentive schemes on con­ sumers’ interest, a McNemar Chi-Square test was performed. McNemar test is used to check the association between dichotomous data of two sets of samples when the collected data involves a “before and after” situation. The test is planned in such a way that the subjects are sepa­ rated into two sets based on their favorable and unfavorable views on any system. After some management, the same number of subjects are requested to share their opinions about the given system, to know whether they favor it or not [80]. In the present case, the same cus­ tomers gave their preferences for different incentive schemes at one point in time. In this occasion, for the analysis, the “before” situation was taken as the responses received for one incentive scheme and the “after” situation was taken as the responses received for another incentive scheme, under the same main program. As part of the preparation of data, responses were grouped into two, based on willingness, namely, “not interested” and “interested”. As this test was intended to get an idea of the interest of consumers in different incentive schemes, CRF and CPs, the analysis was carried out for programs RCSL and SVP only. QBP was excluded as the incentives in this program were based only on CRF. The null hypothesis, in this situation, was that the two incentive schemes, CRF and CPs, were equally preferred by the customers. McNemar Chi-square test was performed to test the following hypothesis.

Null Hypothesis, H1. There is no association between incentivization and load reduction. To test the above hypothesis, Chi-Square tests were conducted individually for different time frames using SPSS. Willingness to participate in two scales (“interested” and “not interested”) was taken as row and agreed load reduction was taken in a five scale (0% reduction, reduce 1–25%, reduce 26–50%, reduce 51–75%, and reduce 76–100%) in the column for the cross-tabulation analysis in SPSS. The test was carried out for all three programs under different incentive schemes in every time frame. Pearson Chi-Square values and Asymptotic Significance (2-sided) values for each case are tabulated in Appendix A3a. The values for each case were found to be consistent with all time frames. The high ChiSquare value indicated the strength of the association between two variables, showing the strong association between willingness to participate and agreed load reduction. As the Asymptotic Significance (2-sided) values for each case were below the 95% confidence level (p < 0.05), the null hypothesis was rejected, and the alternative hy­ pothesis was accepted. From the accepted alternative hypothesis, it can be concluded that there is a significant association between willingness to participate in the program and load reduction among the consumers. This shows that power reduction could be achieved by offering in­ centives to consumers. From the Chi-Square test, the effect of incentivization on the load reduction was established. To quantify the interest of consumers fa­ voring and not favoring the programs (“interested” and “not interested”, respectively), a Mann-Whitney U test was performed.

Null hypothesis, H3. There is no association between consumers’ willingness and a change in incentives. For performing McNemar Chi-Square test, consumer willingness related responses for the first incentive (CRF) was given as rows and consumer willingness related responses for the second incentive (CP) was taken as columns in SPSS. Cross tabulation for McNemar statistics was run for all different time frames for both RCSL and SVP. From the results, it can be concluded that there was no significant difference in the interest of consumers when the incentive scheme was changed. For example, in the case of RCSL for 04:00 to 06:00 h time frame, only 17 consumers who had shown their interest in CRF were found not to be interested in CPs. Similarly, only 14 consumers who had shown their interest in CPs were found not to be interested in CRF. A probability value (p-value) was calculated via an online calculator [92], by giving McNemar Chi-Square value as input with a degree of freedom of 1 and confidence level of 0.05. From the results shown in Appendix A3c, it can be noticed that for both programs, the p-value is always higher than the confidence level (P > 0.05). Hence, the null hypothesis was accepted. According to the null hypothesis, there is no association between the

4.1.3. Ranking of the distribution of responses Mann-Whitney U test is used to rate two groups in the same popu­ lation based on their ranking [75]. In this study, this test was used to identify the prominent group among consumers having “interested” and “not interested” responses to the IBDR program. Accordingly, the following hypothesis was formulated. Null hypothesis, H2. : The responses of “not interested” and “inter­ ested” are identical. For carrying out the abovementioned test, two groups of indepen­ dent variables were selected, namely, load reduction and willingness to participate. During the analysis in SPSS, dependent variables (load reduction) were fed as the testing variable, and independent variables (“interested”/“not interested”) were fed as the grouping variable. These dependent variables were tested with independent variables of load reduction, which were on the Likert scale (1–5). The test was performed for all three programs under various incentive schemes for different time frames. 8

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change in the incentive scheme and the consumers’ willingness. While consolidating the results of the hypothesis test, Mann-Whitney test and McNemar test, it can be concluded that even in the subsidized market of Kuwait, consumers can be motivated to reduce their elec­ tricity consumption by offering MI or NMIs. The proposed NMI schemes were not implemented in any of the markets but were included based on the suggestions of experts to attract consumers who may not show any interest in financial incentives. Hence, it was decided to check the consumers’ feedback on their choices among the CRF and different uses of CPs. The next section details the results.

the participants, less comfort related issues were anticipated. This could be one of the reasons behind the high acceptance of this program. Additionally, control devices were not needed to be installed in the house as part of this program, which would reduce the maintenance related issues and frequent interactions between the implementer and the consumers. 4.2. Saving potential of the suggested programs As mentioned in section 1.3, electricity is highly subsidized in Kuwait. Majority of the power plants in Kuwait are oil-fired, and ac­ cording to the statistical data published by the MEW, power plants burnt 55.98 million barrels of oil in 2017 [53]. Because of the abovesaid facts, electricity generation accounts for 67% share of greenhouse gas emission in Kuwait [58]. Kuwait power plants emit 870 g of CO2 while producing 1 kWh of electricity, which is 50% higher than the world average of 570 g of CO2. Accordingly, a reduction of 1 MWh of electricity will help in reducing the emission of 870 kg of CO2 [93]. While converting this into revenue in the form of a carbon tax by taking an average price of USD30 per carbon credit [94], reduction of 1 MWh will be equivalent to a saving of USD26.1. Based on the abovementioned particulars, a simple analysis was carried out to quantify the saving potential of the most accepted IBDR programs.

4.1.5. Most preferred incentive scheme In the proposed incentive schemes, the monetary incentive scheme was limited to CRF only, while CPs are a part of the NMI scheme. As the CPs can be redeemed for different NMIs, such as special service in governmental offices, special discount for energy efficient equipment and solar panels, and special recognition and lottery draw, a separate analysis was carried out to see the interest of consumers among different incentive schemes. Frequency table was created to check the most preferred incentive scheme. This analysis was conducted based on the responses received for Question No. 29. Through this question, 448 re­ sponses were gathered in a Likert scale, which indicates the preference of participants among all the four incentive schemes including both MI and NMI schemes. Counts of both “interested” and “highly interested” were clubbed together to show as “interested”, while “not interested” and “not at all interested” were clubbed together to “not interested.” Responses received on “not sure” were not included in both the cases (Table 4). From the results, it can be confirmed that the most preferred incentive scheme was CRF. At the same time, the consumers’ preference for NMIs is also significant. Among the NMIs, most of the consumers preferred SDASP, followed by SSC. Compared to these options, prefer­ ence for LDSR was found to be very low. The three IBDR programs suggested have different characteristics. RCSL and SVP are DLC based while QBP is a DBBB program. Another classification of the program was based on the time frame of these programs. Both RCSL and QBP are hourly plans, while SVP is a long-term plan. Even though the hypothesis test proved the acceptance of these programs among the consumers, the preference of consumers among these programs was not clear. A dedicated question was included in the questionnaire to get feedback on this subject. The results are presented in the subsequent section.

4.2.1. Saving potential of SVP Kuwait has an extreme and prolonged summer, and most of the residents travel during this season, to holiday destinations or their respective country of origin. However, the impact of this nonappearance in the homes does not reflect on the power consumption of the country. From Fig. 3, it is clear that power consumption during summer months is significantly higher than that during any other month. Among the suggested programs, SVP was found to be the most preferred program and according to the responses received, 38% of the residents travel out of the country for a period of 4 weeks (Fig. 4), especially, during the summer months. Among the 38% residents, 30.4% of consumers (11.4% of the total sample size) agreed to participate in the program by reducing their load above 51% in return to CRF. Since there is no official data available, which indicates the number of residents leaving the country during the summer season, an assumption was made as per the above scenario for entire Kuwait. Noticing the high monthly electricity consumption in 2017, consumption data of August 2017 (90,93,690 MWh) was taken for the analysis. During this month, MEW used 7.45 million barrels of liquid fuel, which is a mixture of gas oil, heavy fuel oil, and natural crude oil, which costs KD175.18 million (USD576.3 million) [53]. Further, the analysis was carried out to find out the impact of SVP on both annual energy consumption and peak power demand. This analysis was done by assuming a 50% load reduction, even though the majority of participants were willing to offer more.

4.1.6. Most preferred IBDR program Similar to the question related to the most preferred incentives, a question was dedicated to finding the most preferred program also (Question No. 27). The choices given to consumers were different pro­ grams, and their preferences were recorded on a 5 point Likert scale as mentioned in the earlier section. The collected data were fed to SPSS in a similar way. Frequency table was prepared as part of the analysis. From the results, it was concluded that the most preferred program was SVP, followed by RCSL and QBP. The details of the frequency distribution are given in Table 4. As SVP was planned to be implemented during the vacation period of

Name

Total Responses

Program

SVP RCSL QBP CRF SDASP SSC LDSR

448 448 448 448 448 448 448

Incentive

Interested respondents Number

Percentage

294 230 164 316 288 270 176

65.6 51.3 36.6 70.5 64.3 60.3 39.3

(2)

Rpl ¼ PL*Sr*Ppc*Alr MW

(3)

Where, Rc is the expected reduction in electricity consumption, Mc is the total monthly consumption during the selected month, Sr is the percentage share of the residential sector in the total electricity con­ sumption (69%), Ppc is the percentage of participating consumers (in this case, the percentage is related to the families who travels out of the country for four weeks and are interested to participate in the program for reducing more than 51% load), Alr is the average expected load reduction (50%), Rpl is the expected peak load reduction, and PL is the peak power demand recorded on a summer day of 2017 (13800 MW) [53]. This predicts a reduction of 3,57,655 MWh of monthly electricity consumption and 543 MW of peak power accounting to a 3.93% reduction.

Table 4 Frequency distribution of most preferred IBDR program and incentives. Program/Scheme

Rc ¼ Mc*Sr*Ppc*Alr MWh

9

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Fig. 3. Monthly energy consumption and peak power demand for the year 2017 [53].

used for calculating the savings. From the calculations, it is clear that by the proper implementation of RSCL/QBP program, the peak power can be reduced by 585.6 MW, which is equivalent to 4.24% of the PL of 2017. As data regarding the willingness to participate and load reduction potential in RCSL program were collected in different time frames, such as 4:00 to 6:00 h, 6:00 to 8:00 h, 8:00 to 13:00 h, 13:00 to 17:00 h, 17:00 to 22:00 h, and 22:00–4.00 h, the total savings on a peak summer day (26 July 2017) was calculated based on the hourly power data given in the statistical yearbook [53], as follows: Rc ¼ R4-6 þ R6-8 þ R8-13 þ R13-17 þ R18-22 þ R22-4

(4)

Where, Dr is the expected total reduction in a day; R4-6, R6-8, R8-13, R13R18-22, and R22-4 are the reductions for various time frames. The calculation is given in the following table and explained consequently. The calculation used in Table 5 is based on the following equation:

17,

Fig. 4. Vacation pattern of different consumers.

Rtf ¼ Amc*H*0.69*Ppc*0.5 MWh If all other variables remain unchanged, and the 3.93% oil used for power generation is saved, it would account for 0.29 million barrels, which can fetch a direct savings of KD6.89 million (USD22.7 million) in terms of fuel alone for the selected month. The saving from subsidy is an added benefit. However, due to the lack of information on the amount spent on the subsidy, and the total expenditure towards the imple­ mentation and maintenance of IBDR system, expected savings from the subsidy is not included in the study. Savings of 3,57,655 MWh of elec­ tricity will reduce 254,462 Mt of CO2 emission, equivalent to KD2.3 million (USD7.6 million).

(5)

Where, Amc is the average monthly consumption and H is the number of hours in the time frame. The cumulative reduction expected for a peak power consuming day is found to be 11,702 MWh, which is 3.90% of the daily energy con­ sumption (Table 5). Neglecting seasonal variations and assuming 3.90% reduction in all months of the selected year, a reduction in the con­ sumption of 3,54,446 MWh can be achieved, which subsequently leads to a reduction in CO2 emission by 317,584 Mt. 4.3. Impact of suggested programs on Kuwait’s electricity market

4.2.2. Saving potential of RCSL and QBP Through the survey, it was noticed that 36.3% consumers were interested to participate in peak power reduction program (time slot: 13:00 to 17:00 h) through RCSL and 36.1% through QBP. As the numbers were close by and the sample was the same, the scenario of RCSL with CRF scheme was chosen for demonstrating the results. Among the interested participants, 23.3% (12.3% of the total sample size) of consumers were willing to reduce their load by 50% or more. The same assumptions and equation (Eq. (1)) used in the case of SVP were

From the statistical yearbook [53], it can be observed that the average increase in yearly PL and energy consumption from 2014 to 2017 is 3.6% and 3.8%, respectively. MEW is expecting an increase of 4.7% in the yearly peak power demand and currently is ready to meet the growing demand. The available reserve capacity in 2017 was 36% and it can decline to 18% in 2021 according to the predicted peak power demand growth. Accordingly, MEW is planning to expand its generation capacity by 2700 MW in 2023. 10

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Table 5 Expected energy reduction from RCSL on a peak day. Time Frame

Average consumption, MWh [84]

6 to 8 12655 8 to 13 13719 13 to 17 13595 17 to 22 12564 22 to 4 11140 Total/Average a b

Total consumption, MWh [84]

Percentage of participating consumers

Expected Reduction, MWh

Percentage reduction

25309 68594 54380 62820 89120 300223a

7.6% 18.5% 11.4% 4.7% 11.4%

663 4384 2139 1016 3500 11702a

2.6% 6.4% 3.9% 1.6% 3.9% 3.90%b

Total. Average.

The results obtained indicate that the 4.24% reduction expected from the RCSL program itself is capable of meeting the growth to a greater extent. By considering the contribution from SVP in the summer months, the growing demand can easily be met by the proposed IBDR programs. The combined potential of RCSL and SVP was not calculated in the study, which can lead to the opening of new heights to the con­ sumers for participating in both programs, in terms of combined bene­ fits. Scope of SVP can be extended throughout the year as residents travel during different seasons. Even though the proposed programs are prepared from the view of implementer, it is beneficial to consumers in many ways. According to the experts’ interview response/results, an average energy consumption for a typical Kuwaiti villa during a summer month is around 15 MWh and as per the subsidized price, the consumer has to pay KD30 (USD98.7). If the consumer is traveling during the summer season and joins the SVP program by offering 50% reduction towards the CRF of 10 fils (USD0.039) per kWh and after the successful implementation of the program, the consumer can receive a CRF of KD75 (USD246). In addi­ tion to the financial savings, involving in such programs will improve the awareness of residents. The reduced operation of the household equipment will not only increase the life span but also save expenses toward maintenance too. The oil required to produce 1 MWh of electricity is approximately 1.75 barrels [95]; in the process of reducing 7.5 MWh of electricity, MEW can save 13 barrels of fuel, which costs KD305 (USD1003) [53]. In addition to this, major savings from subsidy can also be expected. By taking the cost of electricity as KD34 (USD10.3) per MWh [96], the government can save KD240 (USD790) from the subsidy resulting in a combined savings of KD545 (USD1793). Considering that the revenue saved from the subsidy is fully utilized for the implementation, main­ tenance, and incentivization of the SVP program, MEW can still have a massive savings of KD305 (USD1003), which creates a win-win situation to every stakeholder. Further to that, once the IBDR programs are functional and achieve the desired target, MEW’s overall production cost will reduce as a result of not running less efficient power plants during the peak time, which are generally maintained to run during this period. Moreover, the country can earn revenue by exporting the fuel saved by these programs.

4.4.1. Policy for introducing IBDR programs Irrespective of the subsidized pricing, consumers’ interest in the IBDR programs showed their level of interest in controlling the energy wastage in the country. From the survey results, it was clear that by giving appropriate incentives, customers can be motivated to reduce their power consumption. However, according to experts, proper policy support from the government’s side is also needed. It is important that while developing the policies, attention should be given to many areas, such as; implementer; infrastructure; and cost and funding. In most of the markets, the implementation of all EC programs is carried out by the utility establishment only [97]. Depending on the government’s strat­ egy, different ways of introducing new agencies can be included in the newly developing policy. Some of the potential agencies that can be considered are aggregators, private companies, nonprofit organizations, etc. Funding and profit sharing are other important aspects that have to be included in the policy. These aspects can be interconnected with the required upgrading of infrastructure to implement IBDR programs effectively. As smart meters are required to measure and record the power consumption, it can be considered as the minimum infrastructure required for the implementation [98–100]. This means that the policy should be adequate to ensure the installation of smart meters in all dwellings. 4.4.2. Policy for consumer-focused awareness While analyzing the survey data, the ranking of consumers based on “not interested” and “interested” categories was carried out keeping “not sure” as neutral. From the results, it is clear that more consumers opted for “interested” category than “not interested” category. This leads to the need for formulating a special policy for finding consumers in the “not interested” category and exploring the reason behind their decision. This will open the door for addressing some unknown factors and remedia­ tion processes. Such policies can include consumers in “not sure” cate­ gory also. For example, from Fig. 6, it can be noticed that for the time period between 8:00 and 13:00 h, 233 consumers showed interest in cooperating with RCSL having the CRF scheme. For the same period, 102 consumers expressed their unwillingness in the form of “not interested” and 103 consumers were “not sure” whether to participate or not. This scenario is similar to other programs also. It can be assumed that addressing the concerns of consumers in “not sure” category would be easy compared to addressing the concerns of consumers in “not inter­ ested” category. From the same figure, it can also be observed that in the case of SVP, consumers in “not sure” category are much lesser than those in RCSL and QBP. This is due to the simplicity of the SVP compared to other programs. By providing proper awareness and taking care of the consumers’ concerns, authorities can remove different hindrances that restrict them from participating in various IBDR programs. By following a properly developed policy, most of the consumers in “not sure” category can be elevated easily, but gaining the willingness of consumers in “not interested” category may require more intensified study to make the proposed policy a rigid one.

4.4. Need for policy formulation and its significance From the different analyses carried out in the study, it was learned that all IBDR implementations require good policy support. The importance of government support was one of the significant findings of document analysis. The results of the survey analysis were based on the direct responses received from the consumers, which have good signif­ icance in this study as they focused on the end users in the market where IBDR programs were proposed to be introduced. In addition to the need for an IBDR policy, results of survey analysis focused on the need for policies in three more areas, namely, policy for consumer-focused awareness, policy for giving incentives, and policy for power usage during summer vacations (Fig. 5), which were also supported by the results of data analysis.

4.4.3. Policy for giving incentives The success of the IBDR programs highly depends upon the effective 11

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Fig. 5. Policy requirements.

Fig. 6. Distribution of consumers’ decision on willingness to participate.

distribution of incentives. As consumers showed interest in both MI and NMIs, all related aspects should be considered while framing the policy. As most of the consumers selected CRF as the most preferred incentive scheme, a policy for formulating an appropriate amount of CRF for a certain amount of power reduction needs to be generated. This policy should cover the production cost, and operation and maintenance costs of the IBDR programs, time of the event, etc. The way of redeeming the CRF also needs to be detailed in the policy. Some of the practiced

methods are monthly bill credit, yearly bill credit, and discounted electricity price [101]. The proposal of allocating CPs in proportion to consumers’ power reduction was designed based on the experts’ suggestions. Hence, the feasibility of introducing them to a real market has to be evaluated. Undoubtedly, the introduction of such schemes in a market requires policy support. In the first stage, a policy should be developed for calculating the CPs, which depends on many parameters that were used 12

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to calculate the CRF. The redemption of CPs is the real way of rewarding consumers. The facility to accumulate a big amount of CPs without having a facility to utilize them will be disappointing and will backfire on the program’s existence itself. In this study, three ways of redeeming the CPs were suggested such as SSC, LDSR, and SDASP. Separate policies have to be prepared for all of these. As far as the SSCs are concerned, there should be appropriate coordination between different governmental agencies to put them into practice. For introducing LDSR also, an appropriate policy formulation is essential. Parameters, such as the minimum points required to qualify for the draw, the type of prizes, the way of recognizing consumers who contributed effectively, etc., need to be included in the policy. Subsi­ dizing of the energy efficient appliances requires a very strict policy, by which the importing/manufacturing of less efficient appliances can also be restricted [102]. Moreover, the percentage of discount against the redeemed points, the outlets for delivering energy efficient appliances and solar panels, etc., have to be specified in the policy.

4.5.2. Compliance with conservation status quo Analysis in this section is carried out based on the two major status quos mentioned by scholars under the government’s policy of conser­ vation [61]. The first status quo focuses on the incentives given to en­ ergy saving technology adaptation and development, which touches upon the role of incentives in EC programs. This status quo focuses on the importance of providing a discount for energy efficient equipment and solar panels. Even though it is in line with one of the suggested NMIs, part of the developed IBDR program, this status quo needs to be developed further to introduce both MI and NMIs to ensure trouble-free implementation of the programs. The need for the formulation of a na­ tional energy efficiency policy was well discussed in one of the studies conducted by Ref. [103]. In this study, authors outlined the important aspects to be considered while preparing the policy, which include the establishment of national power and energy database. These will be the backbone of the customer baseline for calculating incentives. The second status quo is related to the legislative enforcement of conservation programs on residents, although the existing policy does not support such actions. Unfortunately, this status quo is not at all favorable to the SVP program. By modifying the policy in favor of the SVP program, the implementer can obtain a minimum commitment from consumers to participate whenever the entire family travels out of the country for a long period, especially in summer.

4.4.4. Policy for power usage during summer vacation Compared to the abovementioned policies, this one is more country specific. From the survey analyses, it was clear that most of the con­ sumers preferred SVP as the best program among the suggested ones. This stressed the importance of formulating a policy for those who leave the country during the summer months without taking any EC measures. The government can easily ensure electricity reduction by imposing some penalties on the residents who travel during the summer season. However, all of the experts denied imposing any type of penalty for not participating in EC programs. A detailed study needs to be conducted before developing a policy for forcing consumers to reduce their con­ sumption during this period. The relevance of the abovementioned policies in Kuwait’s electricity sector has been analyzed separately and the details are presented in the following section.

4.5.3. Kuwait’s Second Development Plan 2015–2020 (DP15-20) Three energy strategy goals suggested in the Second Development Plan are encouraging to the newly suggested programs. Introducing micro solar power units on the rooftops of buildings, which is one of the NMIs suggested by the program, can contribute to the first goal of meeting 15% of the electricity demand from renewable energy by 2030. It was predicted that due to the availability of cloudless sky and pro­ longed sunny days in Kuwait, horizontal solar panels have the power generation potential of around 8 kWh/m2 [104]. The preference given by consumers to SDASP shows their interest in solar panels, and the power generation potential of solar panels in Kuwait demands the need for appropriate policy suitable for promoting solar panels for DSM. It is seen that many policy makers suggest to provide incentives to promote renewable energy production [105]. The effective implementation of IBDR programs will certainly be an asset for aiming the second goal of 12% reduction in domestic consumption by 2035. Once the above­ mentioned two goals are achieved through DSM, the way to achieve the third goal of reducing 33% of CO2 emission by 2035 can be much easier. The recently published Sustainable Development Goals of Kuwait [106], explains the various policy reforms to achieve energy efficiency. It is encouraging to note that most of the suggested reforms are directly connected to the recommended IBDR programs. Promoting the energy service companies, as a support to consumers in saving energy will help them act as aggregators in the RCSL program. Especially, the consumer-focused awareness campaign suggested by the IBDR pro­ grams, based on the survey, is one of the reforms mentioned in the sustainable development goals. On several occasions, the MEW has proven its capability to launch effective awareness programs, and “Trsheed” was one of the most discussed awareness programs ever launched in Kuwait [107]. A more focused and intense awareness pro­ gram should be designed to identify the consumers in “not sure” and “not interested” groups. Accordingly, appropriate measures have to be formulated to garner their interest in the IBDR programs by addressing all of their concerns.

4.5. Policy implications in Kuwait’s electricity sector and need for modifications In this section, the available policies and their association with the new policy requirements are explored to implement IBDR programs in Kuwait. To carry out this process, the authors revisited the reference materials mentioned in section 1.3. 4.5.1. Compliance with MEW’s Electricity Conservation Code of Practice While following the development of various versions of Kuwait’s Electricity Conservation Code of Practice [67], it can be observed that the MEW is updated with the latest technological development taking place around the globe. Restriction incorporated in the latest revision of power allocation per unit area of the building for different loads such as lighting, AC units, etc., is a perfect example to highlight this. Some of the other important developments observed over time include the intro­ duction of cooling recovery units, variable speed drives, cool storage systems, district cooling, seawater cooling for condensers, programma­ ble thermostat, building automation systems, etc. While mapping the new policy requirements with the code of prac­ tice, it can be seen that the introduction of programmable thermostats would be supportive of the suggested programs. However, the code should modify to include remote control facility for them and introduce remotely controllable on/off switches for non-thermostatically control­ lable loads. This will make the implementation of RCSL programs easier. Since the implementing agency for following the code of practice is building owners, some of the vital infrastructure requirements, such as smart meters, communication systems, etc., have to be taken care by either MEW or private parties. This gap in the policy is in line with the recommendations made by scholars earlier [70], in which authors emphasized the need for a policy to attract direct investments for infrastructure development.

5. Limitations and scope for future work In this study, the acceptance of different IBDR programs by various consumers in the country was analyzed using an online survey. Since CRF was identified as the preferred incentive scheme, a dynamic way of calculating the power generation cost for Kuwait has to be evaluated which is missing in the present literature. The development of 13

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appropriate models will be useful for calculating the CRF optimally by considering different influencing variables. This will be useful for finalizing the incentives for both CRF and CP. From the survey analysis, it was learned that a lot of consumers expressed their interests as “not sure” for participating in IBDR programs. Additional study is required to identify the factors influencing the con­ sumers under this category. By identifying these factors, proper moti­ vation can be provided to these selected consumer groups for shifting their willingness to “interested”, which can fetch high impact on the success of IBDR programs in the country. From the findings, it is clear that consumers can be influenced by offering both MI and NMIs for reducing their consumption. All the NMIs suggested in this study are found to be attractive to consumers. A separate study has to be conducted to check the feasibility of introducing the suggested NMIs in Kuwait.

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6. Conclusions Many electrical markets follow DSM strategies as a cost-effective alternative to conventional supply-side management strategies for meeting the growing electricity demand. In addition to the document analysis, the data collected from the experts also support this statement. The results of the analysis carried out based on the data collected using the questionnaire support that all of the suggested IBDR programs can positively influence consumers in reducing their electricity consump­ tion. Among the three suggested programs, SVP was preferred by the consumers. Likewise, among the four incentive schemes, the majority of the consumers preferred CRF. Even though consumers are more attrac­ ted to MI (CRF), they are equally interested in NMIs also; and among the NMIs, the majority preferred SDASP. The change in the incentive scheme does not influence the willingness of the consumers to partici­ pate in the group who are “interested” in IBDR programs. Additional study is required to identify the factors influencing the consumers in the category “not sure”, and “not interested”. By identifying these factors, proper motivation can be given to these selected groups of consumers for shifting their willingness to “interested”, which can have a high impact on the success of IBDR programs in the country. Among the above­ mentioned programs and policies, electricity usage policies for the summer season should be given high importance, as it will not have any negative impact on the comfort of consumers. Saving potential of IBDR program and its impact on the reserve capacity analyzed in this study strongly recommend introducing IBDR programs even in a subsidized electricity market anywhere in the world. In conclusion, a summary of the consumers’ outlook and policy re­ quirements in terms of IBDR programs which can contribute immensely to fortify Kuwait’s energy future is provided here. A detailed and welldrafted policy should be devised with an extensive stakeholder contri­ bution, and as such, an investor process is necessary for guaranteeing the acceptability of the policy institution and for ensuring that its actions begin at the earliest. Suitable institutions must be brought in, with or without the corresponding market mechanism, which can bridge the gaps in the needed technology supply chain, social financing and guaranteeing of energy accessibility. Proper implementation of the suggested IBDR programs will not only benefit consumers but also help Kuwait improve its position in the indexes of per capita electricity consumption and per capita CO2 emission, and help achieve other goals mentioned in the sustainable development plan. Appendix A. Supplementary data Supplementary data to this article can be found online at https://doi. org/10.1016/j.rser.2019.109490.

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