Electricity pricing and social benefits analysis in interaction between supply and demand

Electricity price as a market lever plays a key role in interaction between supply and demand. Considering that electricity price in sale market is still regulated in some countries like China, we propose a new method of formulating peak-valley price (PVP) and interruptible price (IP) based on maximizing social benefits. Through implementation of the pricing measures, demand-side resources can be better integrated and exploited. In addition, advantages are complementary when two pricing measures are implemented together. Probabilistic production simulation and genetic algorithms (GA) are used as tools for solving. Results show that the proposed pricing mechanisms are reasonable and implementation of PVP and IP can bring more social benefits.