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Electricity rate plan & DR

Electricity rate plan

TPC has been promoting load management for over 40 years, and it continues to take on the responsibility of stable power supply for the entire Taiwan. From the demand management perspective, it has used the price incentive to guide customers to change power consumption behaviors in order to reduce peak power consumption and to achieve power supply stability. The price-type demand response measures currently being promoted by TPC include: Inclining Block Rate (IBR), Seasonal Rate, Time-Of-Use (TOU) Rate, and Critical Peak Pricing (CPP).

Inclining Block Rate (IBR) refers to the pricing according to different blocks of power consumption block. Currently the pricing is determined via 6 blocks, and the price per kWh is ranging from NTD 1.63 to NTD 6.41. Under such rate structure, the electricity bill will be increased along with the increase of power consumption. IBR can prompt users (especially those who consume a lot of electricity) to reduce unnecessary power consumption, thus enhancing the energy use efficiency and helping TPC to achieve the obligation of energy saving and carbon emission reduction. Most residential houses and small commercial users are using IBR plan.

The Seasonal Rate is for reflecting the higher power supply cost in summer. TPC’s Seasonal Rate is determined by two seasons (Summer and Non-summer), and it is implemented in all rate plans (except for the package rate). Seasonal Rate will force some users (such as large factories or enterprises) to shift a part of power demand to non-summer months. Even if the shift is impossible, Seasonable Rate can also contribute to the reduction of power demand during peak hours in summer while encouraging the enhancement of energy efficiencies of power consuming appliances. In addition to the package rate users such as street lights, currently Seasonable Rate is applied to all users.

Time-Of-Use Rate refers to different electricity rates for different times of use. Currently TPC has introduced a total of 10 Time-Of-Use Rates for various users, which can be divided into two major categories: one is the rate including peak hours and off-peak hours, and the other is the rate including the half-peak hours. TOU Rate can make most users shift power consumption during peak hours. Even if users cannot shift the power consumption load, TOU Rate can still encourage users to reduce the energy consumption during peak hours and to enhance the energy use efficiency. For example, users will try to raise the set temperature of air conditioner during peak hours in summer. So far, TOU Rate is enforced on users of high voltage and above, while it is optional for low voltage users. Users of TOU Rate account for 70% of all users.

Critical Peak Pricing (CPP) can allow TPC to implement high electricity rate during the days of tight power supply to flexibility suppress power consumption during peak hours. On the contrary, participating users can be rewarded with the lower rate during other periods. There will be 30 days of CCP assigned by TPC in summer based on the consideration of power supply situation. Currently all users of high voltage and above can select the CPP plan.

The deployment of AMI allows TPC to adopt more delicate and diversified design of electricity rate plan in order to strengthen the price signal and guide users to conduct power consumption management. In order to provide more diversified electricity rate options, TPC introduced “Simple Residential and Commercial TOU Rate” in 2016 for residential houses and small stores. The features of Simple Residential and Commercial TOU Rate” are as shown below:

1. Easy to understand

The electricity rate structure only contains user fee (fixed monthly fee) and variable fee (calculated according to actual power consumption), so it can easily be understood by general users of residential houses and small stores.

2. More options

“Simple Residential and Commercial TOU Rate” provides two plans (Two-stage and three-stage) to allow users to carry out more flexible energy management.

3. Saving more energy

Additional fee will be applied when monthly power consumption exceeds a certain amount, which can strengthen the energy saving effectiveness and reduce energy consumption.

A total of 46,863 users selected the “Simple Residential and Commercial TOU Rate” in 2019, indicating a rather high level of participation.

Customers could have access to real-time power consumption situation and electricity rate information via the bilateral communication function between TPC and users provided by AMI. Currently TPC is working on new electricity plan, such as Real-Time Pricing (RTP), to fully utilize AMI while guiding users to more flexibility carry out power consumption management. Real-Time Pricing refers to different electricity rate in every hour in order to truly reflect the feature of fluctuation of power supply cost. The notification of applicable price of each hour of the day will be sent to users the day before to allow them to plan their power consumption behaviors according to the price information. The price fluctuation of RTP is greater than TOU Rate or CCP Plan. The electricity rate will be rather high during the few hours of higher Loss of Load Probability (LOLP), thus prompting users to shift or reduce the power consumption during peak hours.

In 2019 TPC recruited 300 users to conduct RTP test for the purposes of understanding users’ reactions under different hourly electricity rates and figuring out whether or not it can significantly help with the suppression of peak load.

By providing more accurate price information, TPC hopes to make users adjust their power consumption behaviors in coordination with cost variation and system situation. If so, it could reduce the costly power generator scheduling and thus reducing TPC’s demand for peak capacity and overall power system cost. Looking to the future with the Big Data and real-time bilateral communication function provided by AMI, TPC will develop diversified dynamic electricity rates and various energy saving measures.

Demand Response

Due to the ever raising living standard, the demand for electricity in Taiwan has been stringent. Paris Agreement sets out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming. Additionally, Taipower’s projects for power development have been hampered by difficulties in land acquisition and by opposition from various environmental protection movements. Consequently, engaging customers in demand-side management can always help solve a part of power supply problems. And for the reason, Load Management is adopted universally in order to increase the reliability of power supply and the efficiency of power utilization and to reduce the cost of power supply.

In order to increase the reliability of power supply and efficiency of power utilization, Taipower has accommodated customers with load management by adopting Demand Response Programs since 1979, with the first program of TOU Rate. The following programs have been implemented at present:

 ◆A. Time of Use Rate

 ◆B. Seasonal Rate

 ◆C. Preferential rate for Ice Storage Central Air-Conditioning System

 ◆D. Demand Response & Load Management Program

  ◇a. Scheduled Load Reduction Program

  ◇b. Emergency Load Reduction Program

  ◇c. Demand Bidding Program

  ◇d. Interruptible Air Conditioning Program

The load profile in recent years in Taiwan are illustrated as follows:

Owing to the continuing growth of domestic economy and the promotion of the living standard, the demand for electricity has become much more stringent than before. It had boomed system peak load from 31,010 MW in 2009 to 37,057 MW in 2018. In year 2008 and 2009, however, the system peak load declined over the previous year due to the global financial crisis and the government’s policy of “Energy Conservation & Carbon Reduction” and in year 2012, the system peak load declined over the previous year due to the European debt crisis.

In 2018, the peak and off-peak load were respectively 37,057MW and 25,768 MW. The proportion between peak and off-peak load was 1:0.70. In 2009, it was 1:0.68. Comparing the proportion between peak load and off-peak load from 2009 to 2018, it shows that transferring load from peak to off-peak period has been accepted and implemented by customers gradually.

In order to reduce the demand for power and the growth of peak load, Taipower has implemented demand response program to encourage customers to transfer the period of production process from peak load to off-peak load. In August 2018, which was the month with the most users joining“Demand Response & Load Management Programs (excluding Interruptible Air Conditioning Program)”, 2,084 customers applied and the amount of contracted reduction load was 2,418 MW. During the peak day (Aug 1, 2018), the peak load was clipped by 1,039 MW.

In the future, Demand Response will be promoted continually through combining pricing strategy with hardware improvement. Furthermore, to enlarge the participation rate of the customers, Demand Response will be enhanced through R&D, absorbing the experience from other power companies and taking the customers’ opinions into consideration. Moreover, with the advent of advanced meter infrastructure (AMI), Taipower will diversify its Demand Response Programs to encourage voluntary load reduction according to price signals.