Time-of-use pricing in retail electricity market: Step tariff vs. usage-based schemes

• Published in: 2016 International Conference on Probabilistic Methods Applied to Power Systems (PMAPS) pp. 1 - 5
• Main Authors: Yanglin Zhou, Feng Gao, Song Ci, Yang Yang, Yuemei Xu
• Format: Conference Proceeding
• Language: English
• Published: IEEE 01-10-2016
• Subjects: Decision support systems; Electricity supply industry; Games; Pricing; Probabilistic analysis method; Probabilistic logic; Retail electricity market; Sensitivity; Stackelberg game; Time-of-use pricing
• DOI: 10.1109/PMAPS.2016.7764129

With the advances of Advanced Metering Infrastructure (AMI), it is possible for power customer and utility company to adjust their consumption behaviors or schemes in order to achieve higher profits in retail electricity market. Recently, relevant research emerges from demand side management (DSM) view. Time dependent pricing has been proposed as a DSM method to influence user demands. Initial investigations have shown its advantages over the conventional time independent pricing. Nevertheless, much is unknown in how a practical and effective time dependent pricing scheme can be designed. In this paper, we combine game-theoretic approach and probabilistic analysis methods to explore the design space of time dependent pricing. In particularly, we focus on usage-based and step tariff schemes. Our findings include: step tariff scheme improves capacity utilization during high demand period and can earn higher users' surplus than that in usage-based scheme all the time.