A fast interactive optimal load management algorithm under time-varying tariffs

Abstract A new approach to electricity tariff structuring, in which the tariff is varied continuously according to the actual production cost of electricity, has attracted many research workers. This paper begins by defining an analytical framework, using which each consumer is able to maximize his returns. Under this framework, a conceptually simple and yet computationally efficient algorithm has been developed to help each consumer in achieving his own goal. Based on the method of Lagrange multipliers, each method for improving the consumption pattern is ranked according to its incremental cost of implementation. In the first numerical example the algorithm provides a medium-size industrial consumer with the choice between self-generation and load shifting. In the second numerical example well-managed loads are shown to make good returns for the supplier and the resulting load factor is improved, leading to savings in fuel and capital costs.