Differential tariff
Encyclopedia
Differential tariff is an example of demand side management
where the price per unit of energy varies with time.
with minimum inconvenience and maximum profit. DSM is a measure taken by utilities to influence the amount of timing of customer energy consumption in order to utilize energy resources most efficiently. These techniques are most useful in real time pricing environments. A large number of DSM techniques are available. Differential tariff or real time pricing is one such technique.
, this technique is employed. As the variable load has some peaks and valleys, the supplier must install his equipment which will be capable of supplying the peak consumer load. During valley periods, the equipment will be underutilized, thereby decreasing the energy efficiency
of the equipment. Hence the supplier will try to ensure equipment is utilized to its rated capacity for the entire duration whenever it is in the commissioned state. With this type of tariff, the consumer will try to consume more energy during valley periods by avoiding energy consumption during peak (expensive) hours.
Energy demand management
Energy demand management, also known as demand side management , is the modification of consumer demand for energy through various methods such as financial incentives and education...
where the price per unit of energy varies with time.
Background
There are several reasons why utilities manage demand through special programs. The utilities' reaction was the introduction of demand side management programs to overcome these problems. The concept of DSM program in power systems is to bring both supplier and consumer around a common platform for effective utilization of available energyEnergy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
with minimum inconvenience and maximum profit. DSM is a measure taken by utilities to influence the amount of timing of customer energy consumption in order to utilize energy resources most efficiently. These techniques are most useful in real time pricing environments. A large number of DSM techniques are available. Differential tariff or real time pricing is one such technique.
Differential Tariff
To implement the above mentioned method of flattening the load curveLoad curve
]A load curve is a chart showing the amount of electrical energy customers use over the course of time. Power producers use this information to plan how much electricity they will need to make available at any given time...
, this technique is employed. As the variable load has some peaks and valleys, the supplier must install his equipment which will be capable of supplying the peak consumer load. During valley periods, the equipment will be underutilized, thereby decreasing the energy efficiency
Energy conversion efficiency
Energy conversion efficiency is the ratio between the useful output of an energy conversion machine and the input, in energy terms. The useful output may be electric power, mechanical work, or heat.-Overview:...
of the equipment. Hence the supplier will try to ensure equipment is utilized to its rated capacity for the entire duration whenever it is in the commissioned state. With this type of tariff, the consumer will try to consume more energy during valley periods by avoiding energy consumption during peak (expensive) hours.