Electricity consumption management in a competitive electricity market

Abstract

A power system is characterized by the nonuniform nature of electric energy consumption. In the competitive electricity market, the electric energy cost is the spot one, which is determined for every fixed time interval and can significantly differ with the hours of maximum and minimum loads, on business and nonbusiness days, etc. The consumer is primarily interested in reducing the energy consumption during the peak load hours and shifting it onto the off load periods, which results in load leveling and allows for energy saving. To solve the problem of improving the energy consumption reliability and safety, maintaining the power system stable operation as well as optimizing the electric energy cost, the following solutions can be proposed:- limiting the energy consumption during the peak load periods and shifting it onto the off load periods; - making long-term bilateral contracts on energy and power purchasing; - locating the low capacity sources (distributed generation) near the consumers; - introducing energy saving technologies into goods and services production. The paper presents the analysis of the effect of energy consumption limitations on the consumer's profit in the short-term perspective. The loss function for consumers can be expressed mathematically in different ways. The criterion expressions for the energy consumption are defined provided the loss of profit is minimum. The consumer sector is shown to have to be of a greater regulating power in the electricity spot market operation. © 2014 WIT Press.