Algorithmically Developing Efficient Time-of-Use Electricity Rates
The disconnect between price variability of wholesale electricity sales and the uniformity of the retail prices observed by most consumers results in well documented inefficiencies. Time-of-use (“TOU”) electricity tariffs offer a middle-ground between dynamic wholesale prices and flat retail rates. A customer subject to a TOU rate has their consumption binned into discrete seasons (e.g., summer, winter) and periods (e.g., off-peak, mid, on-peak) – with prices varying by season and period. TOU rates can be challenging to design and the results often rely on a regulator’s subjective sense of reasonableness.In this paper, I outline a new method for developing multi-season, multi-period TOU rates using optimization techniques. This method identifies optimal TOU tariffs based on granular price and load data, using a curve-fitting approach. These TOU tariffs include explicit tradeoffs between different cost categories and between different season or period specifications. It also offers a simple method for comparing the relative efficiency of candidate rate designs, even if those designs have different numbers of seasons, periods, or price differentials. After describing the approach, I apply this methodology to a utility in California to demonstrate how it could be implemented in practice
Year of publication: |
[2021]
|
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Authors: | Griffiths, Benjamin |
Publisher: |
[S.l.] : SSRN |
Subject: | Theorie | Theory | Strompreis | Electricity price | Lastmanagement | Demand-side management | Energiekonsum | Energy consumption | Elektrizitätswirtschaft | Electric power industry |
Saved in:
freely available
Extent: | 1 Online-Ressource (14 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 18, 2020 erstellt |
Other identifiers: | 10.2139/ssrn.3732850 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013236874
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