Policy / Systems / Technology

November 12, 2012

 

City of Kitakyushu Tests Dynamic Pricing in Advance of Peak Demand to Encourage Energy Saving

Keywords: Energy Conservation Local government Policy / Systems 

JFS/City of Kitakyushu Tests Dynamic Pricing in Advance of Peak Demand to Encourage Energy Saving
Copyright Kitakyushu City


The city of Kitakyushu, in Japan's Fukuoka Prefecture, started the trial adoption of dynamic pricing of electricity in April 2012 in the Yahatahigashi ward of the city. In the pricing system, the electricity rate is increased when electricity demand is estimated to rise, or a maximum air temperature of 30 degrees Celsius or higher is predicted for the next day. On July 5, 2012, there was an announcement that electricity rates would be increased during peak demand hours on July 6, the next day, because the maximum temperature for the day was forecasted at 31 degrees Celsius. This is the first implementation of the dynamic pricing since its adoption.

The purpose of dynamic pricing is to induce "peak cuts" and "peak shifts" of electricity demand by modifying electricity rates to influence consumption behavior.

In this trial, targeting 74 apartments and seven experimental houses equipped with fuel and solar cells and storage batteries, the usual rate of 15 yen (about U.S.19 cents) was raised to 50.1 yen (about 63 cents) during peak hours the next day (1 to 5 pm). The rate change was indicated by smart meters installed in each household. The effect of power rate fluctuations on power consumption at each household will be studied further.

Related JFS article:
Kitakyushu to Test Dynamic Pricing for Electricity in FY2012
Four Areas in Japan Begin Own Next-Generation Energy and Social System Projects

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