Abstract
This paper expands on a previously-presented methodology that merges the physical properties of energy with microeconomic principles: The physical side of the model informs how much electricity is used to satisfy services that people desire, while the microeconomic side imposes a utility function to represent household satisfaction. This paper adds energy efficiency investment to the price-based behavioral demand response and presents results representative of the long-run steady-state. It examines several electricity pricing schemes and energy efficiency options, with the costs and benefits of each option explicitly modeled in the physical representation.
