Managing Costs of the Capacity Charge through Real-Time Adjustment of the Demand Pattern

Marcin Sawczuk, Adam Stawowy, Olga Okrzesik, Damian Kurek and Mariola Sawczuk ()
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Marcin Sawczuk: School of Civil and Environmental Engineering, Cornell University, Ithaca, NY 14850, USA
Adam Stawowy: Faculty of Management, AGH University of Krakow, 30067 Kraków, Poland
Olga Okrzesik: Faculty of Management, AGH University of Krakow, 30067 Kraków, Poland
Damian Kurek: Modus Sp. z o.o., 03925 Warsaw, Poland
Mariola Sawczuk: Modus Sp. z o.o., 03925 Warsaw, Poland

Energies, 2024, vol. 17, issue 8, 1-17

Abstract: This work presents a production management platform developed to minimize the costs of the capacity charge, part of the electricity bill associated with the cost of maintaining grid capacity during periods of high, fluctuating loads. After a summary of the regulatory solutions on the capacity market in Poland, a capacity charge management system is presented, specifically designed for production facilities within the Energy-Intensive Industry sector. The proposed platform combines hardware data collection, a simulation tool analyzing the electrical energy demand profile to predict the future impact on the capacity charge, and a cloud-based user interface providing real-time recommendations to the plant operators regarding the corrective actions needed to minimize the cost of operation. It was pilot tested in collaboration with a large production facility in Poland, for which the capacity charge was among the main components of the electricity distribution costs. Pilot tests were conducted in the period from January 2022 to September 2023. The tested platform allowed us to shorten the time span of elevated capacity charges from 33% in the year 2022 to only 7% in the year 2023. It also reduced the benchmark capacity charge indicator by more than 11%, from 4.02% to −7.56%, over the duration of the experiments. This improvement was achieved without major changes to the organization and planning of the work.

Keywords: electrical energy demand management; capacity charge; decision support models; electricity cost; capacity market (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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