Optimized reaction of large electrical consumers in response to spot-price tariffs

Novel tariff structures have been introduced by power utilities over the past two decades in order to induce load shifts to achieve the aims of load management strategies. As a result of the availability of reliable communications between suppliers and consumers, new 'smart' metering equipment and the re-organization of the UK power supply industry, the potential for dynamic- or spot-price based tariffs has been recognized. In order to ensure the successful introduction of such a pricing scheme, it is important to make use of accurate consumer process models as well as spot-price behavioural models to provide the means by which a consumer would optimize his production schedules in the light of rapidly changing tariffs. This paper builds up consumer models from fundamental process characteristics and applies optimizing techniques incorporating spot-price models in order to develop algorithms which would minimize production costs and contribute towards the philosophy of joint supplier/consumer optimality through spot-pricing.