Price-based demand side management: Assessing the impact of time-of-use tariffs on electricity sector in Lebanon

Abstract

Supplying peak energy demand in a reliable, cost-effective manner is a critical focus for utilities internationally. Recently, electricity systems have been examined worldwide for their environmental impact including climate change, depletion of resources through the continued use of fossil fuels, and the consistently rising cost of electricity to customers due to the investment required for upgrading infrastructure to provide power during periods of peak demand. All these issues could be avoided if residential customers changed their demand patterns. This research focuses on Demand Side Response (changes to the time of electricity use), rather than on electricity demand reduction. One of the most common demand-side management programs consists of time-of-use (TOU) tariffs, where consumers are charged differently depending on the time of the day when they make use of energy services. This tariff system has the potential to reduce energy demand during peak hours, which will decrease costs and carbon dioxide emissions across the electricity system. This will allow more efficient use of existing electricity generation and network capacity. Also, this system would reduce the need for investment in new capacity and minimize the use of less efficient generation plants. In this work, an optimal tariff model is proposed and evaluated using the Smart Meter Analytics Platform (SMAP) solution. In addition, the impact of this optimal system will be assessed on a dataset of residential users in a Lebanese town where smart meters are installed, in terms of changes in electricity demand profile, price savings, and carbon footprint reduction.