Pricing Tariffs Research Articles

Integrating Home Energy Simulation and Dynamic Electricity Price for Demand Response Study

This paper studies how to develop and evaluate demand response strategies from the consumer's perspective through a computational experiment approach. The proposed approach includes a home energy consumption simulator, a demand response mechanism obtained through optimization, particle swam or heuristic method, and an integrative computing platform that combines the home energy simulator and MATLAB together for demand response development and evaluation. Several demand response strategies are developed and evaluated through the computational experiment technique. The paper investigates and compares characteristics of different demand response strategies and how they are affected by dynamic pricing tariffs, seasons, and weather. Case studies are conducted by considering home energy consumption, dynamic electricity pricing schemes, and demand response methods.

Cobb-Douglass Utility Function in Optimizing the Internet Pricing Scheme Model

The greater numbers of internet users the greater challenge will be tackled by ISP to provide good services but gain maximum profit. By analyzing Cobb-Douglass utility function we will obtain optimal pricing scheme. Wu and Banker analyzed modified Cobb-douglass utility function and obtained optimal model of flat fee and two part tariff for homogen consumers meanwhile we focus on getting optimal pricing scheme model by using original Cobb-Douglass utility function. The first step to conduct this research is by formulating Cobb-Douglass utility function then analyzing that function. The results show that we obtain optimal pricing scheme model for homogenous and heterogeneous consumer cases. The two-part tariff pricing scheme yield better optimal solution rather than flat fee and two-part tariff pricing scheme regarding with homogen consumers and heterogen consumers based on willingness to pay. For heterogeneous consumers based on consumption level, the optimal pricing scheme is on two-part tariff pricing scheme.

Cobb-Douglass Utility Function in Optimizing the Internet Pricing Scheme Model

The greater numbers of internet users the greater challenge will be tackled by ISP to provide good services but gain maximum profit. By analyzing Cobb-Douglass utility function we will obtain optimal pricing scheme. Wu and Banker analyzed modified Cobb-douglass utility function and obtained optimal model of flat fee and two part tariff for homogen consumers meanwhile we focus on getting optimal pricing scheme model by using original Cobb-Douglass utility function. The first step to conduct this research is by formulating Cobb-Douglass utility function then analyzing that function. The results show that we obtain optimal pricing scheme model for homogenous and heterogeneous consumer cases. The two-part tariff pricing scheme yield better optimal solution rather than flat fee and two-part tariff pricing scheme regarding with homogen consumers and heterogen consumers based on willingness to pay. For heterogeneous consumers based on consumption level, the optimal pricing scheme is on two-part tariff pricing scheme.

Impacts of Green Electricity Markets in the United Kingdom, Germany and Finland

In liberalized electricity markets, a wide variety of competing green electricity products are available to customers in addition to competition on tariff price. These voluntary products are marketed as environmentally friendly and claimed to support renewable energy production, new capacity building and offer other environmental benefits. We review products in the UK, Germany and Finland and find that they encompass different mechanisms such as renewable sourcing, green funds or carbon offsetting. The interface between voluntary markets and renewable energy policies is especially studied. We assess if voluntary products offer additional benefits and identify possible problems like double counting or merely re-marketing hydropower produced in existing plants. We analyse the transparency of products and their other sustainability impacts like energy efficiency improvements, local production, reduction of imported fuels or river restoration. We find that labels are important in increasing market transparency and setting criteria for green energy products.

Drug tariff price updates: July 2014

Drug tariff price updates: July 2014

What economic support is needed for Arctic offshore wind power?

Abstract Wind power is increasingly being installed in cold climates and in offshore locations. It is generally recognised that installing wind power to offshore locations is more expensive than onshore. The additional challenges from Arctic conditions with annual sea icing are still poorly known. We reviewed the existing knowledge of offshore wind power costs and developed a calculation model for the economics of offshore wind turbines in Finland, including taxes and sea base rent, to obtain a base case for determining the required tariff support. The model was tested with different production and cost rates to obtain a tariff price, which would make offshore wind power on Finnish territory economically viable for the producer. The main developers of planned offshore projects in Finland were interviewed to obtain a comparison between the created model and industry expectations. The cost of erected turbines was estimated to be 2750 €/kW. With this cost of capacity, it was clear that a higher than the current tariff price (83.5 €/MWh) will be required for offshore developments. Our analysis indicated a price level of about 115 €/MWh to be required. We found that even rather small changes in cost or production rates may lead to excess profits or economic losses and further research and pilot projects are required to define a more reliable tariff level.

Negotiated Learning for Smart Grid Agents: Entity Selection based on Dynamic Partially Observable Features

An attractive approach to managing electricity demand in the Smart Grid relies on real-time pricing (RTP) tariffs, where customers are incentivized to quickly adapt to changes in the cost of supply. However, choosing amongst competitive RTP tariffs is difficult when tariff prices change rapidly. The problem is further complicated when we assume that the price changes for a tariff are published in real-time only to those customers who are currently subscribed to that tariff, thus making the prices partially observable. We present models and learning algorithms for autonomous agents that can address the tariff selection problem on behalf of customers. We introduce 'Negotiated Learning', a general algorithm that enables a self-interested sequential decision-making agent to periodically select amongst a variable set of 'entities' (e.g., tariffs) by negotiating with other agents in the environment to gather information about dynamic partially observable entity 'features' (e.g., tariff prices) that affect the entity selection decision. We also contribute a formulation of the tariff selection problem as a 'Negotiable Entity Selection Process', a novel representation. We support our contributions with intuitive justification and simulation experiments based on real data on an open Smart Grid simulation platform.

The Development of Integrated Public Passenger Transport in Slovenia with Special Emphasis on Pricing

Within the EU, there exist deliberate attempts at the introduction of passenger-friendly integrated public passenger transport (PPT), which should solve many inconveniences that now hamper passengers in using the existing transportation system and should increase the PPT demand. The centerpiece of the integrated PPT system is the integrated ticket, which ideally also implies the integrated pricing (tariff) system. Due to the decline in PPT services in Slovenia the responsible Ministry launched a project aimed at the development of integrated PPT. A study was conducted as part of the project, focusing on the ticket pricing (tariff) model in relation to the existing customer structure. The model is largely based on the transport policy principle, rather than the cost principle, with the Austrian state of Styria as the selected comparable region. The paper also presents the introduction of very reasonably priced integrated monthly student ticket in Slovenia, which demonstrated the importance of substantial government subsidies leading to an increase in student ridership.

Accurately costing unilateral delayed DIEP flap breast reconstruction

Free tissue transfer for breast reconstruction is widely practiced in the UK and its availability forms part of the NICE guidelines in treating breast cancer. Free flap reconstruction scores highly on patient reported outcome measures for both immediate and delayed procedures. However there are significant resource implications and a concern that the financial burden is not adequately met by the fixed price tariff system (Payment by Results). This study aims to compare the cost of treatment with both local financial estimates and reimbursement. We conducted a prospective costing analysis for 10 consecutive delayed unilateral DIEP breast reconstructions from August 2011 by a single surgeon in Frenchay Hospital, Bristol. Comparison was made to both the hospital's costing estimates and the Health Resource Group (HRG) tariffs received for 27 similar cases performed by the same surgeon in the 2010-11 financial year. The mean treatment cost for performing a delayed unilateral DIEP procedure was £7628 (±£754 Standard Deviation). This compared to an estimate from the financial department of £8072±(£1683 SD). These values were not significantly different (p=0.27). The HRG tariff was £8792 (±£423 SD). There was an average net income of £720 per case. Personnel in theatre represented the largest cost area at an average of 73% of total cost. This study highlights that the costs of this procedure have been estimated accurately by the financial department and that the current HRG code provides adequate reimbursement. The new HRG code for 2012-13, HRG JA14z, provides significantly less reimbursement at £7012 and measures need to be taken to address this. This study has identified that personnel costs are the greatest contributor to overall cost and allowed us to recognise and implement changes to improve efficiency.

Investigating the option of installing small scale PVs on facility rooftops in a green supply chain

Industry practitioners and policy makers are under increasing pressure to promote green supply chains through the integration of renewable energy sources. Changing facilities from net energy users to net energy producers is a major concern for supply chain managers who are interested in greening their business. Building integrated photovoltaics (BIPV) is an innovative design idea to achieve energy positive buildings. In a BIPV building, photovoltaic (PV) arrays are integrated into the structure of the building in order to transform the incident solar radiation to clean energy that can be used in facility operations. This option is dependent on the economic attractiveness of the solar PVs, which, in return, depends on the policies (incentives, subsidies, feed-in tariff) in effect at the facility location, the efficiency of the PVs installed, and the amount of incident solar radiation at the facility location. We present an economic model that calculates the cost per kWh capacity of solar PVs installed and then integrate the decision of installing PVs of different sizes on the facility rooftops of a supply chain subject to the different environmental policies available. We study the implications of our model based on a sensitivity analysis for different carbon credit prices, PV generation costs, and feed-in tariff prices.

固定価格買い取り制度（FIT）における太陽光発電の機動的な買い取り価格改定の必要性

固定価格買い取り制度（FIT）における太陽光発電の機動的な買い取り価格改定の必要性

A dynamic pricing approach to electricity prices in the Indian context

In this paper, we study the mechanism of dynamic pricing of electricity and its opportunities in the Indian context. We compare the economic efficiency of dynamic pricing vis-à-vis the traditional flat tariff of electricity. We analyse various ways in which dynamic tariff can be introduced in the electricity market and we show the Indian experience in this regard. We consider the state of Maharashtra, in particular, to understand how the time of day (TOD) pricing system has been introduced and how it is more efficient than the flat tariff approach. We develop a mathematical model using pseudo-real data (as per the advice of a renowned sector expert) to show how TOD tariff is more efficient than flat tariff and how real-time pricing (RTP) tariff is associated with the uncertainty of electricity bills. We further emphasise how the dynamic pricing system can be modified to increase its efficiency.

REPLACEMENT OF THE REGULATED PRICE OF OIL SHALE-BASED ELECTRICITY WITH OPEN-MARKET PRICE AND REAL-TIME TARIFF SYSTEM OPPORTUNITIES

The Estonian retail electricity market opened on the 1st of January 2013. The wholesale electricity market has been operating open successfully for some time already. The liberalized electricity market creates new opportunities for consumers. From 1 January 2013, all electricity producers compete on power exchange. This means that the price of the electricity produced from oil shale is no longer regulated by the State and Narva Power Plants, like other power companies, are competing in the open electricity market.The liberalized electricity market and new remotely readable meters enable retail dealers to offer consumers more flexible packages. For example, a new pricing system could be developed that takes into account actual costs of electricity production at the exact time these are made.The aim of this article is to give an overview of possibilities of real-time pricing and compare the existing tariff systems to the hourly variable pricing tariff system.

Price of Simplicity under Congestion

In this paper, we consider revenues of the NSP (network service provider) when there exists a externality. In particular, we compare revenues obtained using a flat price and two-part tariff and analyze the effect of congestion on the revenue loss when using a simple entry fee in lieu of the two-part tariff. Previous study has shown that when there is no delay disutility the revenue loss is small, which leads to a low Price of Simplicity. However, in this study, we show that in an extreme case where all users are identical, the price of simplicity is substantial. Then we consider a more practical scenario where users have different preferences, and show that even in this case, under congestion externality, the price can be extremely high.

Cost effectiveness of epidural steroid injections to manage chronic lower back pain

BackgroundThe efficacy of epidural steroid injections in the management of chronic low back pain is disputed, yet the technique remains popular amongst physicians and patients alike. This study assesses the cost effectiveness of injections administered in a routine outpatient setting in England.MethodsPatients attending the Nottingham University Hospitals’ Pain Clinic received two injections of methylprednisolone plus levobupivacaine at different dosages, separated by at least 12 weeks. Prior to each injection, and every week thereafter for 12 weeks, participants completed the EQ-5D health-related quality of life instrument. For each patient for each injection, total health state utility gain relative to baseline was calculated. The cost of the procedure was modelled from observed clinical practice. Cost effectiveness was calculated as procedure cost relative to utility gain.Results39 patients provided records. Over a 13-week period commencing with injection, mean quality adjusted life year (QALY) gains per patient for the two dosages were 0.028 (SD 0.063) and 0.021 (SD 0.057). The difference in QALYs gained by dosage was insignificant (paired t-test, CIs -0.019 – 0.033). Based on modelled resource use and data from other studies, the mean cost of an injection was estimated at £219 (SD 83). The cost utility ratio of the two injections amounted to £8,975 per QALY gained (CIs 5,480 – 22,915). However, at costs equivalent to the tariff price typically paid to providers by health care purchasers, the ratio increased to £27,459 (CIs 16,779 – 70,091).ConclusionsWhen provided in an outpatient setting, epidural steroid injections are a short term, but nevertheless cost effective, means of managing chronic low back pain. However, designation of the procedure as a day case requires the National Health Service to reimburse providers at a price which pushes the procedure to the margin of cost effectiveness.Trial registrationISRCTN 43299460

Natural Gas Pricing in India: Availability, Assessability & Affordability

In India the natural gas market which has a very slow growth initially during the period of eighties, has now witnessing an asymptotic growth soon after import of LNG in 2004 and KG D-6 gas flow in 2009. India's hydrocarbon vision statement envisages the share of natural gas to be about 25% by 2025. Traditionally the power and the fertilizer sectors require the maximum amount of gas. In the future also the trend is expected to be same. According to a 'Study on Common Pool Price Mechanism for Natural Gas in the country' prepared by Mercados Energy Markets India Private Limited in January, 2010, it was estimated that demand would originate by about 70-75% from power and fertilizer sectors alone. The power and fertilizer sectors are sensitive to price volatility. Power tariffs are regulated and the fertilizer price is also controlled by the Government. The return on investment is assured by providing subsidies. In both these cases, as a social commitment, the Government considers itself as a major customer and the subsidy is provided through PSUs and the Government treasury.Generally, the prices of LNG in the Asia Pacific basin are linked to crude oil. This leads to volatility in the prices and higher price levels as compared to existing natural gas supply basket. It thus becomes important to consider alternative arrangements that permit new supplies without compromising the interest of the consumers. One way of assuring this is by pooling arrangements, but it has its own repercussions..Presently, different prices of natural gas prevail in the country. Before the KG D-6 gas production commenced, almost 40% of the total gas being supplied was based on APM. Even in this, there are different prices which prevailed for the priority sectors, i.e. power and fertilizer, North Eastern region and the non-priority sectors. Another complexity is that seven more types of prices are prevalent for gas coming out of Production Sharing Contracts, be it from PMT, RAVVA, KG basin or other fields. Third category is LNG, which is available broadly at the prices based on buyer-seller contracts.With limited pipeline Infrastructure, different production costs for conventional and unconventional gas, the gas market still has regional characteristics and a single price throughout the country would be a dream. In addition the transportation tariff and the tax structure have direct bearing on the cost of natural gas to the customer. This paper reviews the systems and practice adopted in India for Gas pricing and compares them with international practices regarding price pooling, tariff setting and tax structure and tries to analyze the extent to which these can be applied for India. Given the circumstances, a truly market determined price of natural gas would be in the larger interest of the consumers. It would also help to develop the natural gas market in the country.

An Optimal Pricing Policy for Interruptible Load Contracts in Power Markets: A Case Study for Iran

The electricity market restructuring has created new opportunities for customers to partner with utilities to alter their demand in response to electric system reliability needs or high prices. The consumer participation in wholesale energy markets tends to increase the electricity system reliability, reduce the electricity price volatility, and lower the average electricity prices paid by the consumers. This paper presents a new demand management program for the electric distribution companies (Dist Co.). It models and solves a profit maximization mathematical program for a Dist Co. subject to some constraints related to the customersГўВҖВҷ costs of power interruptions, market price of electricity, and maximum amounts of interruptible loads by different consumers. The outputs of the mathematical program are the optimal load curtailments and optimal price tariffs for different customers that maximize the Dist CoГўВҖВҷs profit function. The particle swarm optimization (PSO) and invasive weed optimization (IWO) algorithms are used to solve the non-linear mathematical program. A case study, for managing the power consumptions of some industrial firms in Iran, is presented and analyzed to show the applicability of the proposed demand management algorithm.

Energy Utility Fuel Allocation Model for Non-Linear Revenue and Regulatory Tariff Implications

The primary motivation for this paper is based on the challenge faced by a utility firm that generates its electricity through multiple coal fired thermal power plants. The utility firm operates in a regulated market and faces severe shortages of low priced coals that are critical to its profitability. The regulatory authority prices the electricity generated on the basis of capacity utilization and energy costs. The capacity component of tariff encourages operation of plants at high utilization levels. Hence, the surplus maximization of the firm turns out to be a non-linear problem. Based on the characteristics of the problem, we suggest a heuristic approach to arrive at the solution. The fallout of the tariff pricing is that it is more profitable to shut-down a power plant rather than operate it at low utilization levels. The secondary motivation for this paper is to address this regulatory tariff issue. An alternate tariff model is proposed that encourages consumption of costlier coals also so that the firm operates at a high utilization level while offering electricity to the grid at a reasonable tariff. Determination of the optimal solution is simple is this model which makes it simple to administer.

Competition Between New Port Governance Models on the Iberian Peninsula

The aim of this article is to analyze the interaction between port devolution processes in Portugal and Spain in their common geographical environment, the Iberian Peninsula. Firstly a review is done of the different port devolution processes in the world which specifically analyses the transition of numerous public and centralized ports to the landlord model. Among the conclusions that we can highlight with respect to the Iberian port systems are the need for a reflection process before any change is made to the port governance model, and greater cooperation between the two countries to avoid any possible future port tariff price wars. The over-investment process that the Spanish port devolution process, especially, has generated must also be mentioned, for highlighting once again the almost inexhaustible ability of ports to eat up public funds for investment that precludes profitability.

The Tariff – traps for the unwary

The Tariff – traps for the unwary