Peak-to-average ratio incentive scheme to tackle the peak-rebound challenge in TOU pricing

Abstract

Time of use (TOU) pricing scheme reduces the peak demand, and electricity procurement costs by shifting flexible loads from peak to off-peak hours. The electricity price is known to the end-users a day ahead or a season in TOU pricing. When penetration of home energy management system (HEMS) and automation in a distribution system is high, the TOU pricing may cause peak rebounds in the grid load profile due to deferrable load accumulation during low price periods. It may cause suppliers’ economic loss, power imbalance, voltage violations, increased power loss in the network, and may overload the transformers and distribution lines. This paper proposes a pricing scheme for residential customers to eliminate the deferrable load accumulation during low price periods of TOU pricing. The proposed pricing scheme considers peak to average ratio (PAR) incentive on energy consumption charge for each price period of TOU pricing. The PAR incentive is included in HEMS at customers’ premises and supplier’s price calculation. The proposed PAR incentive scheme is implemented in 200 houses with different appliances and different energy requirements. The proposed PAR incentive scheme successfully avoids the deferrable load accumulation during low price periods of TOU pricing. The cost of power procurement in the proposed PAR incentive scheme is found lesser than other compared schemes for load profiles with and without solar PV. The proposed incentive scheme also reduces the electricity bills of the customers.