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District heating cost fluctuation caused by price model shift

Jingjing Song, Fredrik Wallin and Hailong Li

Applied Energy, 2017, vol. 194, issue C, 715-724

Abstract: District Heating (DH) is considered as an efficient, environmentally friendly and cost-effective method for providing heat to buildings, and is playing an important role in the mitigation of climate change. Nowadays, Swedish DH companies are facing multiple challenges, and in urgent need for new price models to increase transparency and keep the competitiveness. In this paper, a survey is carried out to understand the structure of the present price models. Then, two restructured price models are proposed and compared with the price model most commonly used. To increase the transparency, price models should be based on users’ measured consumption profile; while to reduce the peak load, adoption of a pricing strategy based on a load demand component is an effective way. Consequently, users with flat consumption profiles will reduce cost, whereas users with steep consumption profiles will have a cost increase, both when charging the load demand cost based on the maximum daily or hourly peak load.

Keywords: District heating; Price model; Transparency; Peak load reduction; Load pricing strategy (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:appene:v:194:y:2017:i:c:p:715-724