Dynamic pricing techniques in Demand-Side Management Smart Electricity Grids: A Review

Abstract

Smart grid is the modern era of electricity for improving the country’s economy. DSM equalizes energy consumption per day using different techniques, as it affects each consumer’s unit cost. Pricing is one of the key component in electricity billing. The supplier prepares integrated electricity offers combining the three elements of the bill, i.e. energy, network costs and taxes and levies. Reducing the electricity cost at residential area is one of the major challenge in DSM. This paper highlights the insight of traditional electricity tariffs and also disadvantages of traditional tariffs. The previously mentioned disadvantages can be overcome by Dynamic pricing .It sets flexible rate based on electricity demands. The application of dynamic pricing in electricity is already well known to the following parts of the world China, Korea, Japan and Asia. This paper gives clear picture of dynamic pricing programs RTP, TOU, and CPP, which will be useful for researchers and academicians.