Economic evaluation of small wind generation ownership under different electricity pricing scenarios

With the Smart Grid trend setting in, demand response plays an important role for both the consumer and the utility. Demand Response is the consumers´ response to the changes in the price of electricity. Dynamic pricing schemes including Critical Peak Pricing (CPP) and Time of Use (TOU) provide options for consumers to influence their electricity bill. Such pricing options may also make owning a small wind generator more viable. The customer will have a choice of deferring loads during peak hours to a later time as well as use their own generation to meet the load demand. Excess generation can be sold back to the utility. Economical evaluation of owning these generators is the focus of this research. A comparison of the Critical Peak Pricing (CPP) and Time of Use (TOU) schemes with the fixed existing rate is shown. The results suggest that the consumer will not see significant changes in their energy bill with the CPP or TOU pricing schemes in effect but implementation of these pricing schemes would help utilities reduce peak demand. This research will also help utilities decide upon electricity rates be applied as well as help consumers decide upon the best pricing scheme to opt for.