Cost-based approach for time of use pricing decision

Yicheng Zhou, Fudong Li, Jinhua She, Chongqing Kang, Yosuke Nakanishi

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Current electricity pricing menu for demand response (DR) which oriented purpose, for example TOU (Time of Use) playing more and more important role in deregulation market, especially after mass introduction of renewable energy and application of demand response mechanism in power market. However, the current studies manly focused on market mechanism and not pay attention sufficiently on the relationship between the electricity price setting menu and the actual power supply cost structure. This paper proposed a cost-based pricing scheme. First, we analyzed the cost structure of variable cost, fixed cost, and reliability loss cost of each power source based on the cost structure of the power supply configuration from long-term economic viewpoint, then conducted a basic study on the setting of electricity charges by time period considering the recovery of these costs. We use a simple example to demonstrate the applicability of this propose and concludes some useful results. The methodology proposed in this paper is one of the cost-based foundational study for actual DR pricing scheme.

Original languageEnglish
Title of host publication2020 IEEE 4th Conference on Energy Internet and Energy System Integration
Subtitle of host publicationConnecting the Grids Towards a Low-Carbon High-Efficiency Energy System, EI2 2020
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages3535-3539
Number of pages5
ISBN (Electronic)9781728196060
DOIs
Publication statusPublished - 2020 Oct 30
Event4th IEEE Conference on Energy Internet and Energy System Integration, EI2 2020 - Wuhan, China
Duration: 2020 Oct 302020 Nov 1

Publication series

Name2020 IEEE 4th Conference on Energy Internet and Energy System Integration: Connecting the Grids Towards a Low-Carbon High-Efficiency Energy System, EI2 2020

Conference

Conference4th IEEE Conference on Energy Internet and Energy System Integration, EI2 2020
CountryChina
CityWuhan
Period20/10/3020/11/1

Keywords

  • Demand Response
  • Fixed Cost
  • LOLP
  • Long Term Economic Analysis
  • Reliability Cost
  • TOU pricing scheme
  • Variable Cost
  • VOLL

ASJC Scopus subject areas

  • Computer Networks and Communications
  • Information Systems and Management
  • Energy Engineering and Power Technology
  • Renewable Energy, Sustainability and the Environment
  • Control and Optimization

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