Incorporating the Effect of Time-of-Use Tariffs in the Extended Conservation Supply Curve

Abstract

The conservation supply curve (CSC)—a plot of the cost of conserved energy (CCE) versus cumulative energy conserved—allows for an economic comparison of multiple Energy conservation measures (ECMs) leading to the identification of economically feasible ones. Its major advantages are separation of the cost of implementing such measures from their benefit and its independence from the fuel price. Different ECMs save different amounts of energy during different periods of the day. Hence, TOU tariffs, implemented to incentivise electrical load management and energy conservation, affect their cost-saving potentials. The CSC, in its present form, does not incorporate the effect of such tariffs. The primary objective of this work was to propose a methodology to extend and to modify the CSC to incorporate the effects of these tariffs, while being able to draw the same inferences as can be drawn from the original CSC. In doing so, energy profiles of the measures (a set of saving potentials over a particular time period, e.g. 24 values for 24 h of the day) and TOU charges (rates over and above the base energy charge, calculated over the same time period) are used to arrive at a value indicating the impact of the TOU rates on said measures. These values, along with the CCEs of the measures, are used to generate the modified CSC. Applicability of the proposed methodology is demonstrated with an illustrative example. Current research is focused on accounting for multiple types of fuels saved by conservation measures.