The Competitive Model Based on the Demand Response in the Off-Peak Period for the Taipower System

The demand response in the off-peak period is proposed to reduce the cost of the expensive fuel for the Taiwan Power Company (Taipower). For the lack of base-load generation units, Taipower has to meet a certain portion of the system demand by mobilizing LNG-fired and oil-fired units, even in the off-peak period. Taipower adopts the time-of-use pricing policy, which charges a pretty low rate in the off-peak period, for the purpose of load management. However, the difference between the fuel cost and income per kilowatthour incurs a huge deficit to Taipower. This paper proposes a competitive model based on the demand response in order to restrain or reduce expensive fuel usage in the off-peak period. By providing a compensation tariff, the deficit can be reduced, and Taipower can run profitably.