Maximum Demand Charges Research Articles

A model predictive control strategy for load shifting in a water pumping scheme with maximum demand charges

This paper defines and simulates a closed-loop optimal control strategy for load shifting in a plant that is charged for electricity on both time-of-use (TOU) and maximum demand (MD). A model predictive control approach is used to implement the closed-loop optimal control model, and the optimization problem is solved with integer programming. The simulated control model yields near optimal switching times which reduce the TOU and MD costs. The results show a saving of 5.8% for the overall plant, and the largest portion of the saving is due to a reduction in MD. The effect of disturbances, model uncertainty and plant failure is also simulated to demonstrate the benefits of a model predictive control model.

A Study on the Optimization of Control Strategy of a Thermal Energy Storage System for Building Air-Conditioning

Many new buildings in Malaysia are installed with a centralized air-conditioning system integrated with thermal energy storage system. Building owners are motivated to reduce the operational costs and are being encouraged by the attractive tariff offered by the utility power provider. However, without proper control the operational costs can be even more than the conventional system due to the higher maximum demand charge. This paper describes the results of an investigation on the actual operating data of a centralized air-conditioning plant integrated with thermal energy storage system operated under two different control strategies. Comparisons on the electrical power consumption, overall plant efficiency and chiller coefficient of performance were carried out by using two identical building load profiles. The results show that the supply pressure control is better than delta-temperature control. The electrical power consumption, overall plant efficiency and chiller coefficient of performance for supply pressure control are 30.1%, 33.4% and 33.5% better than the delta-temperature control, respectively. Also from the general observation on the data it was found out that the storage tank is under utilised. The charging capacity is usually less than the nominal storage capacity. In order to further increase the performance characteristic the plant operation schedule need to be revised.

An Incentive Water Pricing Policy for Sustainable Water Use

By adopting the Water Framework Directive (WFD), the European Commission (EC) and the European Council made recommendations for water pricing policies in European Union (EU) member states with a view to enhancing the sustainability of water resources. Clearly, the directive integrates economic instruments in environmental policies to provide incentives for the sustainable use of water resources. Our analysis will focus on public water utilities, required to be financially self-sufficient, facing demand and capacity shocks. The paper deals with the simultaneous determination of incentive pricing policies and investment rules under an ex~ante maximum demand charge. We will characterize the welfare-optimal capacity selection rule and the welfare-optimal maximum demand pricing rule. Heterogeneous consumers demands are considered when tariffs are set ex~ante, before demands are known. Our results are state-contingent nonlinear pricing that responds to demand fluctuations and capacity constraints.

Derivation of near-optimal pump schedules for water distribution by simulated annealing

The scheduling of pumps for clean water distribution is a partially discrete non-linear problem with many variables. The scheduling method described in this paper typically produces costs within 1% of a linear program-based solution, and can incorporate realistic non-linear costs that may be hard to incorporate in linear programming formulations. These costs include pump switching and maximum demand charges. A simplified model is derived from a standard hydraulic simulator. An initial schedule is produced by a descent method. Two-stage simulated annealing then produces solutions in a few minutes. Iterative recalibration ensures that the solution agrees closely with the results from a full hydraulic simulation.

Optimal Pump Scheduling in Water Supply Systems with Maximum Demand Charges

The calculation of optimized pump schedules is sometimes complicated by the inclusion of a maximum demand charge in the electricity tariff. Maximum demand charges can be as much as 35% of energy costs, and in the United Kingdom they usually apply over a calendar month. In this paper, medium term maximum demand policies are assumed to be represented in daily scheduling by constraints on power use or by penalty costs. Derivation of optimal constraints or penalty costs has been formulated as a stochastic dynamic program in which variations in daily demand for water are modeled as a Markov process, and solved for the case where there is a single maximum demand charge for the system under consideration. A hypothetical case is provided to illustrate the process, and cost functions and optimal constraints for this case are presented graphically. The method has considerable advantages over heuristic techniques because it takes full account of uncertainty in the demand for water, and of the recursive nature of the problem.

Load-management applications for the industrial sector

The goal of any load-management program is to maintain, as nearly as possible, a constant level of load, thereby allowing the system load factor to approach 100%. The important benefits of load management are reduction in maximum demand, reduction in power loss, better equipment utilisation and saving through reduced maximum demand charges. Load shifting, one of the simplest methods of load management, is to reduce customer demand during the peak period by shifting the use of appliances and equipment to partial peak and off-peak periods. Here no loads are being switched off, but only shifted or rescheduled, and hence the total production is not affected. In this paper, a fully fledged program is developed for load shifting and the same has been tried with the actual load data collected from a typical fertiliser and chemical industry plant.

Optimized pump scheduling in water distribution systems

A method based on nonlinear programming for determining the optimal operation of general water distribution systems containing multiple sources and reservoirs is presented. The problem is formulated and solved so that, given the forecasted demands for the coming 24 hours, the initial and final conditions in the reservoirs, the unit and maximum demand electricity charge, and the constraints in the hydraulic properties of all system components, an optimized pumping schedule is found. An optimization algorithm which employs the generalized reduced gradient method and the nonlinear sensitivity analysis has been developed for a basic scheduling problem in which only unit charges are considered. The maximum demand charge, which is weighted by varying degrees from day to day, is incorporated into the scheduling problem. The algorithm uses a feasible initial solution as the starting solution and iterates so that all the interim solutions are feasible.

Welfare-optimal pricing and capacity selection under an ex ante maximum demand charge

This paper deals with the simultaneous determination of welfare-optimal pricing and investment rules under a multi-period ex ante maximum demand charge by allowing the possibility of purchasing electricity from third party generators at some cost when excess demand occurs. I show that at the optimal size of capacity, expected short-run marginal shortage cost and long-run marginal capacity cost should be equal. The optimal maximum demand tariff does not entail marginal cost pricing. In general, it is shown that maximum demand charges are welfare superior to marginal cost pricing when tariffs must be set ex ante, before demand is known.

Exact Incorporation of Maximum Demand Charges in Optimal Scheduling of Water Distribution Systems

Consideration is given to the problem of evaluating optimal control schedules for common types of water distribution systems. For these systems the major operating costs are associated with electricity unit and maximum demand charges for pumped source supplies. Exact incorporation of the nonlinear and discontinuous maximum demand charges is particularly difficult. An existing solution allows for these charges by use of an approximate, but, efficient, dynamic programming technique. The present paper develops an exact procedure within an augmented state space. Additional selection critieria are presented which can significantly reduce the dynamic programming computations due to the added states. The resulting method is shown to be applicable to specific systems containing multiple sources and reservoirs.

The theory of maximum kW demand charges for electricity

The kilowatt (kW) demand charge characterizes most electricity price schedules for industrial customers, yet it has not been analysed thoroughly (compared with time-of-use rates). This article shows how such charges complicate interpretations of past estimates of the industrial demand for electricity. Using a utility maximization (cost minimization) model, we derive consistent demand curves, which are shown potentially to be subject to discontinuities.

Optimisation of a heat pump space heating system

Because the heat pump has a very high capital cost compared with other forms of space heating, and also because the peak space heating demand in the U.K. only occurs for a few hours in the year, it has become recognised practice to install low capital cost supplementary electric heating to meet peak demands. A technique is described which optimizes the mix of heat pump and supplementary capacity to minimize the total cost of operation. A simulation model is employed which uses a weather tape containing hourly outside air temperatures to generate a space heating demand profile for a building of known thermal characteristics. The technique specifically allows the examination of intermittent heating, and in this paper is applied to a small factory operating on a variety of shift patterns. This application is of particular interest because it considers the effect of maximum demand charges on the economics of heat pump space heating systems. It is concluded that the optimum heat pump capacity depends strongly upon the length of shift, and that optimum oversizing of the heat pump system for intermittent heating appears to be lower than for conventional heating systems as a result of maximum demand pricing.