Abstract for: Smart Electricity Grid with Real Time Pricing (RTP):An Alternative to Fixed Electricity Pricing In the Ghana Electricity Market
A smart grid with time varying electricity pricing system ensures that electricity supply is always equal to demand through a constant variation in price during peak and off peak periods. This system maximizes benefits for both producers and consumers of electricity. Prices are adjusted higher during peak demand periods when more expensive sources of generation are connected to the grid. Inversely prices will be adjusted to a lower level during off peak periods. A simulation model based on system dynamics methodology is developed to analyze the causal relationships between price variation and supply demand response. The model design is inspired by the economic principle of how price, demand and supply interact. The central focus of the model is the price which is used to reason about the behavior of demand and supply in the electricity market of Ghana given different pricing mechanism. The results of the study shows that Real Time Pricing(RTP) can be an effective mechanism to meet peak demand as prices are adjusted in real time to cover the cost of electricity supply. It also provides substantial benefits to electricity producers by reducing the cost of capital investment as well as increasing the welfare of producers.