Keep it simple: time-of-use tariffs in high-wind scenarios

Price signals have been suggested to bring about greater demand side flexibility and thus support the integration of variable sources of energy, such as wind. A conflict exists between keeping these signals simple for consumers, while making responses appropriate for increasingly complex supply-demand balancing dynamics in future. This study reviews some of the demand responses observed in time-of-use (ToU) tariff trials and assesses their effectiveness in scenarios with higher levels of wind. The authors simulate wholesale real-time prices for high-wind scenarios as a benchmark tariff. Simple tariff structures are compared against real-time prices for the extent to which they can `nudge´ demand in the `right direction´. They present results which suggest that even in high-wind scenarios, simple ToU tariffs could have a beneficial effect on overall system costs. The load shifting and reduction behaviour observed under ToU trials could lower energy costs by between 4 and 6% without the need for complex price signals.