Electricity Tariff

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BYHassan Ali Mohamed Ali

Supervised By Prof. Dr. Essam El-Din Mohammed Abou-El-Zahab

Cairo UniversityFaculty of EngineeringElectrical Power and Machines Dept.Ph.D. Course 707: Generation and Utilization of Electrical Energy II

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Electricity Tariff. Objectives of Electricity Tariff Structure. Different Electricity Tariff Types. The electricity tariff applied in Egypt . Some Different Consumption Bills . Electricity Tariffs for Different Sources The Tariff Components. European Residential Electricity Tariffs. Power Factor Tariff (at Malaysia). REFERENCES.

Contents of PresentationContents of Presentation

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كلمة TARIFF أصل جبل مضيق سواحل تسكن طريفة تسمى عربية قبيلة كانت

تمر غربيه سفينه كل يجبرون كانوا و عليه وتسيطر طارقالمال يسمون الغربيون فاصبح معينه رسوم دفع على

أو بتاريفة لطريفة TARIFF المدفوع

Electricity Tariff

Definition of electricity tariff:

£E/kWh

The rate of charging for electrical energy supplied by the utility company to its consumer.

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electricity is a commodity which is hard to store, it has to be consumed when produce.

electricity demand varies during the day and night.

but power plants, especially big ones (nuclear, condensed thermal, etc.) are not very flexible.

to stimulate reduction of peak demand (during the day) and increase consumption at night the time of use tariffs are used.

Electricity Tariff

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Tariff charge as a general is depends on various factors:

1) Type of consumer (industrial, commercial, or domestic)

2) Type of service (lighting, heating, etc)

3) Total fixed running annual charges of the utility company

4) Facility for calculating the bill

Electricity Tariff

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An Electricity Tariff Structure has to therefore facilitate the following 3 objectives:

Accessibility – It must be such that it does not become a barrier to the effective use of, and derivation of benefits from, electricity for ALL.

Quality of Life – It should promote continual improvement in quality of life for ALL.

Sustainability – The tariff should be determined such that the sustainability of electricity supply is assured, as well the sustained promotion of access and quality of life.

Objectives of Electricity Tariff Structure

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industrial consumers pay 3 different rates: peak, off-peak and shoulder. Where: offpeak = 10pm-7am shoulder = 7am-2pm, 8pm-10pm peak = 2pm-8pm.

residential consumer pay different charges at day and night (also on weekends).

Different Electricity Tariff Types

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Where for customers connected at LV, the day period covers the time from 8.00 a.m. to 11.00 p.m. in winter and 9.00 a.m. to 12.00

p.m. during summer .

For High and Medium Voltage customers, day-time is from 8.00am to 11.00pm, summer and winter. The night period covers the remaining time.

Different Electricity Tariff Types

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The electricity tariff applied in Egypt The electricity tariff is structured according

to the following:

1) Supply Voltage levels :

price depends on the supply voltage level, where costs are calculated at the generation and network investment, operating and losses costs was added for each voltage level, resulting in increased costs with the decrease in voltage level.

2) Purpose of consumption :

It is mainly an energy tariff, with exception to consumers supplied from medium vlotage and has peak demand 500 KW, the tariff includes both demand charge and energy charge .

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Tariff structure with ascending segments is applied to residential and commercial consumers. The social concern and conservation of energy has always been taken into consideration when setting the electricity tariff in Egypt. The tariff applied to residential consumers is structured with ascending segments which is known as life line tariff where monthly electricity bill is calculated by dividing the consumption on the tariff segments. This sructure encouraged consumers with high consumption to conserve energy and at the same time they subsidized part of the vulnerable consumers consumption.

The electricity tariff applied in Egypt

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Many factors are affecting the increase of the cost of service, mainly:

1) High growth rate of demand, energy consumption increased from 15.7 Twh in 1980/81 to 112 TWh in 2008/2009 with an average annual increase for 7.3%.

2 (High increase in investment costs to meet the high growth in peak demand due to the increase in international and local equipment cost for the construction of new power plants and associated networks .

The electricity tariff applied in Egypt

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The investment reached about 13.2 billion

EGP this year compared to average annual investments of about 4 billion EGP during the five years plan 2002/2007.

3) The increase in foreign currencies exchange rate (EGP/$), fuel prices, operating expenses and wages.

4) The increase in the share of thermalgeneration from 30% in 1975 to 88% in2008/2009 against a constant hydro powerproduction and the increase of fuel cost.

The electricity tariff applied in Egypt

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The electricity tariff for the residential consumption in Egypt is by far less than the one applied in many Arab countries such as Jordan, Algeria, Morocco and some African and Asian countries with the same annual income level as Egypt, such as South Africa, Turkey, India and China.

The electricity tariff applied in Egypt

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Tariff Structure

The electricity tariff applied in Egypt

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Tariff Structure

The electricity tariff applied in Egypt

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Tariff Structure

The electricity tariff applied in Egypt

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American Versus European For Medium And Low Voltage Networks

25Breakdown of Household Tariff for 2008 in Foreign Country.

The Tariff Components

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The Tariff Components

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The Tariff Components(A) Fuel Cost.

Fuel cost is the single largest component in the electricity tariff. It is updated every quarter based on the three-month forward fuel oil price in the first month of the previous quarter. For example, the tariff for the October to December 2008 quarter is based on the 3-month forward fuel oil price in July 2008.

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(B) Power Generation Cost .

This is the non-fuel cost of power generation. It covers the costs of operating the power stations, such as the manpower and maintenance costs, as well as the capital costs of the stations .

The power generation cost will be review once every 24 months. Within each 24-month review cycle, quarterly

adjustments are made to account for inflation .

The power generation cost includes the cost of providing additional services by the generation companies, for example contingency arrangements to enable restart in the event of a system shutdown. It is further adjusted for transmission losses, as a small fraction (about 4%) of the power produced by the companies is dissipated in the transmission network

The Tariff Components

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)C) Grid Charge

The grid charge is set by Country Power Grid to recover the cost of transporting the electricity through the grid. Grid charge set at a level to recover its operating and capital expenditure, including a reasonable return to finance the investments needed to expand and maintain

the grid infrastructure .

The grid charge must be updated every year .

The Tariff Components

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(D )Market Support Services Fee.

The Market Support Services fee is set to recover the costs of billing and meter reading. The fee will be review every year.

(E) Power System Operation and Market Administration Fees.

The Power System Operation and Market Administration Fees are to recover the costs incurred by the Power System Operator to operate the power system to ensure reliability of electricity supply, and the Market Operator (the Energy Company) to administer the wholesale electricity market .

The Tariff Components

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European Residential Electricity Tariffs

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Power Factor Tariff (at Malaysia)

Below 0.85 and up to 0.75 lagging, 1.5% of the bill for that month for each one-hundredth (0.01).

Below 0.75 lagging, A supplementary charge of 3% of the bill for that month for each one-hundredth (0.01).

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A medium voltage industrial consumer (at Malaysia) havingthe following data for its monthly electricity bill: Total electricity consumption in kWh

- 160,000 units The reactive power consumption in kVArh

- 120,000 units For each kilowatt of maximum demand per month

= $ 6 / kW For all kWh = $ 0.07 /kWh

Example – Power Factor Tariff

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i. Determine the monthly maximum demand for this consumer. [take 30 days/month]

ii. What is the total monthly bill charge for this consumer?

Example – Power Factor Tariff

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Example – Power Factor Tariff

Solution:

(i) Monthly max. demand= 160,000 kWh/(30 x 24) = 222.22 kW.(ii) Monthly bill without PF consideration,= 222.22 kW x $ 6 + 160,000 kWh x $ 0.07 = $ 12,530PF = cos (tan-1 (120,000/160,000)) = 0.8Penalty charge for poor PF = = 1.5% x (0.85 - 0.8) x 100 x $ 12,530 = $ 940Total monthly bill charge = $ 12,530 + $ 940 = $ 13470

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REFERENCES

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[1 ] Egyptian Electricity Holding Company, Annual Report 2008/2009.[2] G. H. Hwang, “DISTRIBUTION SYSTEMS AND TARIFFS- CHAPTER

1” University Tun Hussein Onn Malaysia.[3 ] Fox-Penner, P., Electric Utility Restructuring: A Guide to the

Competitive Era, Vienna, VA, Public Utility Reports, 1998: 158. .

[4 ] Bergstr m, Ulrika (1999): Traditional Load Management Versus Reel Time

Load Control. Sycon AB and Link ping University.[5] STEM (2001): Electricity Market 2001. STEM, report ET 31:2001.

[6] D.G.Newman,EngineeringEconomicAnalysis.SanJose,CA103: Engineering

Press,1980.

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