Exploring Demand Management Flexibility as a Catalyst for the GCC Energy Transition: a Framework to Assess Time-of-Use Tariffs

Mohamed Hendam (), Marie Petitet, Salem Boubakri (), Tim Schittekatte and Yannick Perez
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Mohamed Hendam: UPCité - Université Paris Cité, LIRAES (URP_ 4470) - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UPCité - Université Paris Cité, SUAD - Sorbonne University Abu Dhabi, SUAD_SAFIR - SUAD - Sorbonne University Abu Dhabi
Marie Petitet: KAPSARC - King Abdullah Petroleum Studies and Research Center
Salem Boubakri: SUAD - Sorbonne University Abu Dhabi, SUAD_SAFIR - SUAD - Sorbonne University Abu Dhabi
Tim Schittekatte: FTI Consulting
Yannick Perez: Université Paris-Saclay

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Abstract: Power systems in the Gulf Cooperation Council (GCC) Countries have historically been planned and operated under the assumption of relatively flat demand, which aligned well with the operational characteristics of thermal generation. However, the increasing integration of variable renewable energy has significantly altered this landscape, leading to more volatile and peaky residual load profiles (i.e., net of renewable generation). Managing this variability requires greater system flexibility that is often delivered through high-cost, fast-ramping generation units. However, increasing consumers' flexibility, enabled by technologies such as energy storage, electric vehicles and flexible industrial processes, can contribute effectively to system flexibility if managed properly. Electricity pricing structures play a critical role shaping consumer behavior potentially activating consumer flexibility thus guiding system-wide efficiency. This paper proposes a conceptual framework for evaluating how different tariff designs, particularly Time-of-Use (ToU) tariffs, can activate demand-side flexibility, shifting consumption in ways that reduces the reliance on costly flexibility resources. The proposed framework models the interaction between consumers and utilities under time-differentiated tariffs. In addition, it further provides a foundation for assessing tariff designs against alignment with regulatory principles such as consumer acceptability, utility sustainability, and system economic efficiency. While the quantitative implementation is left to future work, the framework offers valuable guidance for policymakers, regulators, and system planners seeking to enable efficient, flexible, and consumer-responsive electricity systems towards the energy transition.

Keywords: Electricity Prices; Energy Storage; Demand Response; Vertically Integrated Utilities; Time Varying Tariff (search for similar items in EconPapers)
Date: 2025-12-15
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Published in Saudi Arabia Smart Grid (SASG) 2025, Dec 2025, Riyadh, Saudi Arabia

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