European experience with peak-load pricing
The experiences of France, England, and West Germany indicate that marginal-cost peak-load pricing does not reduce power demand and will not solve the problems of American utilities needing to expand their generating capacity. Visits to these countries and written communications and reports offer no encouragement that this type of rate reform justifies the belief that capital investment money can be saved and generating capacity reduced. The experience in Europe showed little response from customers. There were other factors serving to offset a demonstration of price elasticity, such as a shift in system peaks so that they no longer correspond to the time periods used to set prices, price restraints set by the government, inflation, and the oil crisis, which tripled short-run marginal costs in a brief time. None of these countries uses peak-load pricing for residential and other low-voltage customers because they feel only the large energy-intensive customers can respond to price differentials. West German and other utilities have been able to improve load conditions by storage heating, however. Electric-storage heating and solar energy storage now being tested in the Northeast may provide a better method of load management for the U.S. Peak-load pricing still needs to be explored where economics and technology make it applicable, such as with interruptible service. 41 references. (DCK)
- OSTI ID:
- 7314034
- Journal Information:
- Public Util. Fortn.; (United States), Vol. 99:6
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
POLICY AND ECONOMY
20 FOSSIL-FUELED POWER PLANTS
ELECTRIC POWER
PEAK-LOAD PRICING
EUROPE
LOAD MANAGEMENT
ECONOMIC IMPACT
CHARGES
COST
DEMAND FACTORS
ECONOMIC ELASTICITY
ECONOMICS
ENERGY CONSUMPTION
ENERGY STORAGE
FINANCIAL INCENTIVES
GOVERNMENT POLICIES
POWER GENERATION
PUBLIC UTILITIES
MANAGEMENT
POWER
STORAGE
296000* - Energy Planning & Policy- Electric Power
290200 - Energy Planning & Policy- Economics & Sociology
200106 - Fossil-Fueled Power Plants- Economics