Taking advantage of real-time pricing programs to reduce energy costs in manufacturing
Increasingly, utilities are offering optional real-time pricing programs to their industrial customers. In many of these programs, the price of electricity changes on an hourly basis to reflect the projected cost of providing electricity to the consumer during that hour. Real-time pricing of electricity will become more prevalent in the future as competitive spot markets or power exchanges for electricity are developed. Real-time pricing can provide industrial energy consumers with new opportunities to reduce energy costs. Under real-time pricing, it may prove cost-effective to reschedule operations from high-price periods to low-price periods, reschedule maintenance activities, or endure voluntary curtailments in electricity service during high price periods. Investments in standby generation, Energy storage devices, and control systems may prove attractive. Successfully exploiting this option requires the development of an effective strategy for responding to changing electricity prices. A number of reports and guides have been prepared under the sponsorship of the electric utility industry to assist utilities and regulators in designing effective real-time pricing tariffs. Yet, industrial energy consumers wishing to exploit real-time pricing have been provided little guidance. This paper examines the potential benefits and costs of real-time pricing programs from the perspective of industrial energy consumers in hopes of filling some of this gap. This paper outlines how industrial energy consumers can develop effective energy cost reduction strategies to take advantage of real-time pricing programs. Typical pricing algorithms and program design features are first described. Common measures and operating strategies for energy cost reduction under real-time pricing are discussed. Practical device is provided to assist energy managers in analyzing cost reduction opportunities from real-time pricing programs.
- Research Organization:
- Planergy, Inc. (US)
- OSTI ID:
- 20001955
- Report Number(s):
- CONF-970750-; TRN: IM0001%%392
- Resource Relation:
- Conference: 1997 ACEEE Summer Study on Energy Efficiency in Industry, Saratoga Springs, NY (US), 07/08/1997--07/11/1997; Other Information: PBD: 1997; Related Information: In: 1997 ACEEE summer study on energy efficiency in industry: Proceedings, refereed papers, and summary monographs, 574 pages.
- Country of Publication:
- United States
- Language:
- English
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