Realization of Load based pricing with integration of renewable generation for a household

Abstract

In order to make a balance between uncertain load demands and variable generations, demand side management (DSM) will play a key role in the development of future smart grids. DSM in coordination with Load based tariffs can potentially improve the system security and reduce the expenses as well as emissions from present energy infrastructures by integrating renewable resources. Effect of three different load based tariff rates on the dispatch schedule is determined. We further examine the effect of penetration of renewable energy resources into the grid on the cost incurred by the customer for electricity consumption under these three different tariff structures. For this purpose, we consider a single household equipped with a renewable energy generator and energy storage device assisted by a dispatch algorithm which determines the most economic dispatch schedule. The results indicate that the load based pricing mechanism is beneficial to the residential customers in comparison to time of use pricing as the former helps reducing the cost of electricity while smoothening the energy demand over the entire time horizon. Thus it suggests that both customer and the utility company may benefit with load based tariff structures. At the same time it is found that the customer benefits economically with higher penetration of renewable resources.