Needle peaking caused by time of day tariffs

Abstract Efficient public utility pricing, in particular time of use tariffs, receives considerable attention in both the theoretical, academic literature and in applied energy policy making. However, the introduction of time of day tariffs may create - and this has happened in some important cases - a new and short demand peak (usually referred to as a needle peak) at the beginning of the low price period. This paper introduces a model which may explain the occurrence of needle peaking and addresses potential cures for this problem.

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