Application Peak Load Pricing

1
Application Peak Load Pricing
1

• No peak switching
• Qpk 50 - 5Ppk
• Qopk 8 - 2Popk
• Ck 3
• Co 2

2
Look at a picture
2
Social optimum Ppk Ck Co Popk Co
P
Qpk
CoCk
Qopk
Co
Q
3
Solve for Qpk and Qopk
3

• Social optimum
• Ppk Ck Co
• Popk Co
• Qpk 50 - 5Ppk gt
• Ppk 10 - (1/5)Qpk
• Qopk 8 - 2Popk gt
• Popk 4 - (1/2)Qopk
• Ppk 10 - (1/5)Qpk Ck Co 3 2 5
• Popk 4 - (1/2)Qopk Co 2

4
Optimal Qpk and Qopk
4

• Social optimum
• 10 - (1/5)Qpk 5
• Qpk 25
• 4 - (1/2)Qopk 2
• Qopk 4

5
Optimal Qpk and Qopk
5
P
Qpk25
CoCk
Qopk4
Co
Q
6
Solve for Ppk and Popk
6

• Ppk 10 - (1/5)25 5
• or
• Ppk Ck Co 5
• Popk 4 - (1/2)4 2
• or
• Popk Co 2

7
Social Optimum
7
P
Qpk
Ppk
Co Ck5
Qopk
Co 2
Popk
Q
8
Could Complicate Problem
8

• Total capital costs TCk f(Qpk)

Operating costs peak TCpk g(Qpk)
Operating costs off-peak TCopk h(Qopk)
Price
9
If charge one price P 5
9
P
Qpk
Co Ck5
P 5
Qopk
Co 2
Q
Qpk'
Qopk'
10
If charge one price P 2
10
Qpk
P
Co Ck 5
Qopk
Co 2
P 2
Q
Qpk
Qopk
Qpk'
11
If charge one price P 2.5
11
P
Qpk
Co Ck 5
Qopk
P 2.5
Co 2
Q
Qpk
Qopk
Qpk'
Qopk'
12
Should we switch to peak load pricing
12
Depends on metering costs.
P
Qpk
Co Ck 5
Qopk
P 2.5
Co 2
Q
4
25
3
37.5