Network capacity charge for sustainability and energy equity: A model-based analysis

Abstract

It is long known that the afternoon peak demand accounts for over-investment in the electricity network assets. This results in a high price of delivered electricity which does not fairly differentiate between peak and non-peak users. Energy tariff is proven to be one of the best demand-side management (DSM) tools for shaping consumers' behaviour. While electricity pricing models, such as inclining block and time-of-use tariffs, have received decent attention as successful mechanisms, there are little discussions about another efficient tariff known as a rollover network capacity charge. It is a penalty for the highest recorded power usage over the previous reading cycle (or year) which is introduced to commercial users in some jurisdictions. With recent price reduction in distributed generation and storage (DGS) systems, the interest has increased in devising policies for directing the household and commercial consumers' behaviour towards using DGS systems in line with DSM objectives. In this paper, we have integrated the rollover network capacity charge into DGS systems investment analysis. The results from a few case studies show the positive impact of capacity charge in directing the peak-consumers' investment decisions towards DSM tools (e.g., energy storage) to curb their peak demands. This not only improves the resilience of the network but also promises as an effective mechanism in energy-justice nexus by avoiding the transfer of the associated costs of peak demand to all users.

Measurement development for eco-innovation capabilities of Malaysian oil and gas firms

“…Hence, the energy sector is expected to exhibit sustainable development commitments through care toward the environment, respect for human rights, community involvement, governance (the ability of elements of social systems as a whole to manage affairs successfully for collective good), business behavior and human resource management (Cassely et al , 2020). This involves a process of establishing and nurturing relationships; learning collaboratively; infusion of stakeholder perspectives; thus, enabling innovations that tackle energy-related sustainable development challenges from the triple bottom line nexus (Khalilpour and Lusis, 2020). An oil and gas firm's commitment toward integrating environmental, economic and social aspects into its economic activity should not be limited to engineering or process, but to all levels of the firm – including internal stakeholders such as employees (Sanusi and Johl, 2020).…”

On the Acceptability of Electricity Demand Side Management by Time of Day

“…In fact, the feasibility of DSM in the sense of shifting power usage time slots was confirmed. In addition, Khalilpour and Lusis [21] showed that imposing a high price on peak users of electricity will promote the spread of devices that are DSM objectives, such as distributed power sources and storage batteries. In addition, the results of some demonstration experiments showed that providing information through in-home displays or e-mails is effective for shifting people's peak behavior [22,23].…”

Competing Globally: Regionally Competitive Energy Tariffs (Rcet) for Export-Oriented Enterprises of Pakistan

“…Many countries have established rules and procedures to ensure affordable energy for companies that rely on exports. Examples from the past may be seen in nations like China, where competitive energy tariffs greatly aided the fast expansion of its manufacturing and export sectors (Khalilpour & Lusis, 2020). Historical energy crises, such as the oil crises of the 1970s, had significant effects on energy pricing and availability, impacting the export industry's competitiveness globally.…”

“…The second significant difficulty is securing cost recovery for energy providers while maintaining competitive rates. Thirdly, governments may be burdened with subsidy costs to maintain competitive energy rates, placing a strain on their budgets (Khalilpour & Lusis, 2020). Additionally, using RCET may result in market distortions and wasteful energy use.…”

“…Insufficient empirical data and analysis exist to establish a causal relationship between regionally competitive energy tariffs and export industry success. Prior research has frequently concentrated on broad energy pricing strategies without going into the specific effects of RCET on export-oriented companies (Bashir, 2021;Khalilpour & Lusis, 2020;Lima & Feijão, 2022). As a result, there is a knowledge vacuum about how much RCET affects the survival and competitiveness of the export business in global markets, considering both gas and electricity costs (Enescu et al, 2023).…”