A New Time-of-Use Tariff Rate for Domestic Consumers in Sri Lanka to Promote Demand Response

It is seen that governments are compelled to invest in Renewable Energy (RE) based power generation to meet the ever-increasing demand for electricity since fossil fuel-based power generation is a major contributor to greenhouse gas emissions and is dependent on the limited availability of non-renewable energy resources such as coal, natural gas and oil which are depleting at a fast rate. Despite the several benefits offered by the use of RE sources like solar and wind, the dependability and stability of power systems are threatened by their stochastic nature. Demand Response (DR) is an alternate strategy to address concerns such as difficulties faced in renewable energy integration, heavy reliance on fossil fuels and high initial investments. It is a component of Demand Side Management (DSM) that transforms consumers’ formerly passive position into one of active participation by altering energy consumption patterns to lower the peak demand. In this paper, new Time of Use (TOU) tariff rates are proposed for domestic consumers in Sri Lanka as a DR program. The required policy changes, challenges, and recommendations along with the potential financial benefits for the participants as well as the utilities are also discussed in order to implement the new tariff schemes in the existing power grid of Sri Lanka.