Dynamic Pricing Scheme for the Java-Bali System Residential Load
Published at : 25 Nov 2019
Volume : IJtech
Vol 10, No 6 (2019)
DOI : https://doi.org/10.14716/ijtech.v10i6.3698
Setiawan, E.A., Prakoso, A.Maulia, V., 2019. Dynamic Pricing Scheme for the Java-Bali System Residential Load. International Journal of Technology. Volume 10(6), pp. 1194-1201
| Eko Adhi Setiawan | -Department of Electrical Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia -Tropical Renewable Energy Center TREC, Faculty of Engineering, Universi |
| Andy Prakoso | -Department of Electrical Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia -Tropical Renewable Energy Center TREC, Faculty of Engineering, Universit |
| Vhania Maulia | Department of Electrical Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia |
The monopoly electricity
market in Indonesia uses flat tariffs but is being encouraged to change to dynamic
pricing. Dynamic pricing scenarios have been implemented in many Western
countries with various types of schemes. This paper
discusses dynamic pricing scenarios based on residential load and generation in
the Java-Bali system. The tariff scheme is a combination of critical peak pricing
(CPP) and time-of-use (TOU). The CPP runs for only a few hours each year
depending on the gas power plant operation. TOU will be used with peak and
off-peak schedules as determined based on residential load characteristics. The
gas power plant is a reference in designing the CPP rates because it is used to
meet peak loads if other plants are unable to meet requirements and its cost of
generating electricity is high compared to other power plants. The dynamic pricing scheme is simulated for a
residential load. Then, the load reduction during peak times and the impact of
reducing electricity consumption in the Java-Bali system is analyzed.
Basic cost of supply; Critical peak; Dynamic pricing; Electricity tariff; Time of use
Dynamic pricing is a program launched by electric
utilities to study a various rate structures to lower peak demand for
electricity (Ton et al., 2013). Taylor et al. (1975), Braithwait (2000), King and
Chatterjee (2003), EPRI (2008) and Faruqui et al. (2010) present the application
of dynamic pricing. Dynamic electricity prices are a demand side management
technique that can reduce peak loads by providing different prices at different
times according to demand. A peak in the load profile is the result of
unregulated requests when additional capacity is needed. This peak load
capacity remains inactive during the off-peak period, which results in the loss
of opportunity costs and system inefficiency. Dynamic pricing can shift demand
from peak to off-peak and help avoid large capital investments.
The
retail electricity market generally offers flat rate or dynamic price. Prices
remain unchanged regardless of demand in the first case, while when prices are
dynamic the price per unit of electricity increases or decreases as electricity
consumption changes. However, generation costs to meet peak demand are compared
to off-peak demand because most peak time generating units have higher
operating costs compared to basic load units. Although fixed rates allow customers’ electricity bills to be free of
uncertainty, this can lead to high capacity additions. While reducing
The dynamic
electricity tariff scenario was conducted with two schemes, TOU and a combination
of CPP/TOU. In this case the off-peak time of the TOU scheme is between 02.00
and 18.00 with a tariff of Rp 1,099.24 and the peak time of the TOU is between
18.00 and 02.00 with a tariff of Rp 2,203.36. This price is fixed throughout
the year. The off-peak time of the CPP/TOU scheme is the same as the TOU
scheme. The peak interval is between 20.00–02.00 and the critical peak interval
is 17.00–20.00. The off-peak and CPP/TOU peak rates are the same as the TOU,
while the critical peak rates are Rp 7,385.08 for 132 hours per year or approximately
1.5% a year. Load shifting will occur by 5% during peak TOU due to its
peak-to-off-peak ratio of 2:1 and 8.75% during CPP/TOU due to its
peak-to-off-peak ratio of 3.5:1. Consumers can benefit my adjusting load usage
to dynamic pricing with smart home technology. Dynamic pricing can encourage
consumers to reduce electricity consumption at peak times, and has a positive
impact by reducing utility grid company expenditure and reducing the emissions/pollutants
from fossil fuels.
This paper was supported and
funded by Hibah Penelitian dan Penulisan Tugas Akhir PITTA B
UI NKB-
0722/UN2.R3.1/HKP.05.00/2019.
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