Tariff structure selection for optimal electricity cost savings on a process plant

Abstract

South Africa's electricity grid is currently under strain due to the high demand of electricity. This strain on the grid has resulted in the increase of electricity costs that has put financial pressure on consumers. In addition to this, consumers that are supplied through municipalities have to cope with additional service costs of up to 20%. Process plants are among the highest energy consumers and are therefore vulnerable to these cost increases. Eskom introduced different electricity tariff structures that are designed to allow consumers to be cost reflective and to decrease the country's peak profile. In addition to this, the Demand Side Management (DSM) programme was implemented to allow consumers to manage their load profile. A clear understanding of a plant operation is necessary before choosing a tariff structure. This study analysed the integration of power consumption with production in order to decide on the tariff structure and load management profile that resulted in the best electricity cost savings. A simulation model was used to integrate plant operational constraints with various tariff structures. The model then produced and optimised load profile and cost savings. The model was used to simulated cost savings on two case studies. The verified annual cost savings amounted to R3.2-million, which is equivalent to 13% of the electricity costs. This presents opportunities for significant cost savings if the right tariff structure is matched to the specific electricity usage trends of the consumer