Abstract
This article discusses a price-based demand-side management model for industrial and large power consumers. We have analyzed various factors affecting the improvement of energy efficiency on a national scale as well as at the level of select enterprises and large electricity consumers and have concluded that demand-side management is one the key areas of increasing energy efficiency, with the price-based consumption as its core element. Using the Russian electricity market as a model example, this article investigates the formation of all cost components of the ultimate power price – electricity, capacity and transmission services. Based on the results of the power cost component analysis, the article concludes that the price-based demand-side management can be applied to all price components and identifies areas and hours for optimal demand-side management in order to minimize the purchase price of electricity, while maintaining the aggregate demand. Based on the identified specifics, we have developed a price-based demand-side management model for industrial and large electricity consumers, taking into account the factors that limit the required management of the demand. The suggested model can be adapted for retail and wholesale electricity customers alike. Given that the Russian electricity market is largely similar to other power markets, such as Nord Pool, EPEX, Powernext, PJM, New England ISO, etc., the suggested management methods can be adapted for application in other countries. The article also discusses a communication strategy for the suggested model. The results of this research have high theoretical and practical importance and can be used in power purchase-related activities of industrial and other large consumers in any country where the electricity is priced according to market principles.
Highlights
The ongoing depletion of global hydrocarbon reserves used for the production of energy resources coupled with the continuously increasing electricity consumption in the developed and, especially, developing economies of the world lead to the ever increasing cost of energy in global and national energy markets
demand-side management (DSM) is enabled through stimulating electric utility consumers to synchronously change their demand schedule of electricity consumption
The Electricity Component The amount of obligation of an industrial consumer to pay for electricity, capacity and transmission is calculated individually according to the hourly electricity consumption in a given reporting month
Summary
The ongoing depletion of global hydrocarbon reserves used for the production of energy resources coupled with the continuously increasing electricity consumption in the developed and, especially, developing economies of the world lead to the ever increasing cost of energy in global and national energy markets. Among the key effects of an energy efficiency policy at the level of the national economy, are: Improving the competitiveness of products by reducing the price of purchased energy in their cost structure. Electricity takes a special place among all energy resources which people use (International Energy Agency, 2017) It is the most common energy carrier in the world due to its wide-spread production, simplicity and low cost of transportation over long distances, distribution to a large number of consumers at the same time, applicability in any climate, and its ability to convert to other types of energy, such as mechanical, thermal and light energy. The implementation of DSM is critical for the Russian economy from the strategic point of view because the demand volatility problem exists at all levels in any country – from a single enterprise to the national grid system in general. The difference is only in the scale of such programs, which is associated with the volume of funding and government support for DSM initiatives
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