Lowering Weighted Average Cost of Generation by Optimizing Operating Time: A Study from Pakistan

With rapidly increasing electricity demand globally, it is crucial to manage the electricity load during peak hours. Fossil fuel-based emission prone generators are often used to fulfill demand during peak hours, which results in an increase in the cost of generation. Demand side management (DSM) is a well-known technique to manage the flexible load. However, it requires increased compatibility with renewable resources, which are cheap but inherently intermittent. Along with financial benefits, electricity management through enhanced incorporation of renewables will also reduce the sum of emissions. In this paper, we use convex optimization to simulate energy consumption, according to the merit order, in Pakistan’s power sector. The simulation framework will be used to find optimal amount of load that can be shifted from an hour, using equilibrium optimization under given constraints. The results depict that the power sector can gain massive financial and environmental benefits using realistic DSM parameters.