Demand side management solution through new tariff structure to minimize excessive load growth and improve system load factor by improving commercial buildings energy performance in Saudi Arabia

The Kingdom of Saudi Arabia (KSA) is one of the most prominent countries in the world in terms of per capita energy consumption and carbon dioxide (CO2) emissions. Owing to factors like burgeoning population, economic and infrastructure development of the country, electricity consumption per capita is very high. Over the last couple of decades the demand for electricity is reported to have grown at an annual rate of 6–8%. The situation is imposing significant stresses on the energy, environmental and economic fronts. The building sector, accounting for almost 80% of the national power consumption, has to play an important role in bringing a positive and sustainable change. Demand side management (DSM) can help curtail the load growth as well as save on investments for new power plants and subsequent transmission and distribution systems. DSM through structuring tariff for commercial buildings can lead to significant savings. The paper aims to design a tariff structure to deliver optimum value and cost saving which yields huge savings economically and environmentally as discussed in the paper.