Title: Large power users and capacity shortages in developing countries: the role of innovative pricing

Authors: Lawrence J. Hill

Addresses: Energy Division, Oak Ridge National Laboratory, Oak Ridge, Tennessee, United States of America

Abstract: This paper addresses innovative electricity pricing as a strategy for managing electric load, offering pricing as an alternative to building generating capacity to meet electric load commitments in the developing world. Drawing upon the Western experience with pricing as a demand-side management strategy, three questions are addressed: (i) Do innovative pricing strategies alter the amount and pattern of electricity consumption for high-voltage users? (ii) What are future directions in electricity pricing for industrial users? and (iii) Are these strategies relevant for power systems in the developing world? The most widely adopted innovative pricing strategies by Western utilities are variants of time-of-use (TOU) pricing, which have generally been effective in reducing load during peak periods. More recently, technological advances have allowed utilities to experiment with aligning electricity prices more closely with actual power delivery costs. While temporal aspects of these innovative pricing strategies have general applicability as a load management strategy, the power systems in many developing countries have more urgent pricing priorities than adopting the most recent strategies of Western utilities.

Keywords: electrical power systems; electricity pricing; energy planning; energy policy; capacity shortages; developing countries; generating capacity; energy consumption; pricing strategies; load management.

DOI: 10.1504/IJGEI.1991.063674

International Journal of Global Energy Issues, 1991 Vol.3 No.2, pp.86-96

Published online: 18 Jul 2014 *

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