The Competitive Model Based on the Demand Response in the Off-peak Period for Taipower System

Abstract

The demand response in the off-peak period is proposed to reduce the cost of the expensive fuel for Taiwan Power Company (Taipower). For lack of base-load generation units, Taipower has to meet a certain portion of the system demand by mobilizing LNG-fired and oil-fired units even in the off-peak period. Taipower adopts the time-of-use pricing policy, which charges a pretty low rate in the off-peak period, for the purpose of load management However, the difference between the fuel cost and income per kilo-Watt-hour incurs a huge deficit to Taipower. This paper proposes a competitive model based on the demand response in order to restrain or reduce expensive fuel usage in the off-peak period. By providing a compensation tariff, the deficit can be reduced and Taipower can run profitably.