Spotlight Activity: Time-of-Use Electricity Price Plan
Since 1999, China has been implementing a time-of-use electricity price to balance electricity use throughout a day. The time-of-use electricity price is a strategy that is intended to help shift electricity use from peak hours to off-peak hours through demand response. At the peak time, as there is a higher demand in electricity use, additional power plants must be used to provide enough energy to all. Therefore, under the time-of-use electricity price policy the electricity price for peak hours will be higher than the off hour-peak price. This is intended to encourage customers to use electricity at off-peak times. The results are more efficient use of energy resources and less pollution.
The price difference between peak and off-peak hours differs from provinces and municipalities. In Beijing, for example, when the electricity a household consumes is under 1 kV, the peak price is ¥1.51 per kWh. Compared to ¥0.35 per kWh in the off-peak time, the difference is ¥1.16 per kWh. For many, this difference in price is a motive to use electricity in the low time when considering the monthly cost for electricity. The price is calculated through a base electricity price that’s applied in the time apart from the peak and off-peak hour. Statistics from the National Energy Administration shows that 8:30 am – 11:30 am and 06:00 pm- 11:00 pm are the usual peak hour that people collectively use electricity at home. From 11:00 pm to 7:00 am, it’s the low hour when fewer people use electricity. Households that use huge amounts of electricity are the target in hopes that they will shift their energy usage to the lower time be used.
Status: Right Direction
The time-of-use electricity price setting is a strategy that helps reduce additional energy expense simply through shifting the times of energy use for many users. It not only encourages users to reduce energy usage in the peak hour, but also reduces the demand on energy suppliers. What needs to be considered is the reasonability of the price setting. If the price difference is too high, it’s possible that peak energy use will be shifted to the time that the price is low. If this happens, the time-of-use policy will lose its value.
Please send the following message to the policymaker(s) below.
Dear National Energy Administration,
The time-of-use policy is a good strategy to regulate the electricity usage time. Apart from knowing the price concerned with the electricity use, it also lets us know how and when energy is provided. We are concerned, however, at price difference of the peak and off-peak hours. Please check your model to see the response on electricity use when applied different prices are applied. The policy may need adjustment if price differences make many people electricity only at times when the price is low.
National Energy Administration
No.38, Yuetan South Street, West City District, Beijing