Electricity pricing

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Electricity pricing (sometimes referred to as electricity tariff or the price of electricity) varies widely from country to country, and may vary significantly from locality to locality within a particular country. There are many reasons that account for these differences in price. The price of power generation depends largely on the type and market price of the fuel used, government subsidies, government and industry regulation, and even local weather patterns.

Basis of electricity rates[edit]

Electricity prices vary between countries and can even vary within a single region or distribution network of the same country. In standard regulated monopoly markets, electricity rates typically vary for residential, commercial, and industrial customers. Prices for any single class of electricity customer can also vary by time-of-day or by the capacity or nature of the supply circuit (e.g., 5 kW, 12 kW, 18 kW, 24 kW are typical in some of the large developed countries); for industrial customers, single-phase vs. 3-phase, etc. If a specific market allows real-time dynamic pricing, a more recent option in limited markets to date typically following the introduction of electronic metering, prices can even vary between times of low and high electricity network demand.

The actual electricity rate (cost per unit of electricity) that a customer pays can often be heavily dependent on customer charges, particularly for small customers (e.g. residential users).[1]

Price comparison[edit]

The table below shows simple comparison of current electricity tariffs in industrialised countries and territories around the world, expressed in US dollars. Whilst useful for comparing world electricity prices at a glance it does not take into account a number of significant factors including fluctuating international exchange rates, a country's individual purchasing power parity, government electricity subsidies or retail discounts that are often available in deregulated electricity markets.[2]

A comparative list of June 2009 prices for Europe may be found in the European Household Electricity Price Index.[3]

The price also differs from the source of the electricity. In the U.S. in 2002, the cost of electricity by different sources is listed below: Coal: 1-4 cents; Gas: 2.3-5.0 cents; Oil: 6-8 cents; Wind: 5-7 cents; Nuclear: 6-7 cents; Solar: 25-50 cents. However, electricity costs from renewable sources depend highly on the source availability, reaching the so-called grid parity in parts of the world where even conventional power plants based on fossil fuel are costly enough (i.e. transportation costs of diesel to isolated communities). The varying costs involved in producing electricity leads to great variance in average electricity rates for residents of different states in the U.S. For example, in 2012, Hawaii residents had the highest average residential electricity rate in the United States (37.34¢/kWh), while Louisiana residents had the lowest average residential electricity costs (8.37¢/kWh). Even in the contiguous United States the gap is significant, with New York residents having the highest average residential electricity rates in the lower 48 U.S. states (17.62¢/kWh).[4]

It is worth noting that the high cost of electricity in the Solomon Islands, as shown in the table below, is primarily a result of the use of imported diesel fuel as the main source of fuel for electricity generators.[5]

In many countries the tariff is considerably lower for high electricity users compared to electricity savers. In Finland the low electricity users in househouilds may pay ca 30% fixed price.

Global electricity price comparison[edit]

For comparison:

  • 1 litre of gasoline/petrol contains 33 megajoules
  • 1 US gallons of gasoline contains 120 megajoules
  • 65 standard alkaline AA batteries contain 1 megajoule
Country/Territory US cents/kWh US cents/megajoule Date Source
American Samoa 38.3 to 40.4 10.64 to 11.22 [6]
Argentina (Buenos Aires) 3.1* 0.86 2006 [2][7]
Argentina (Concordia) 19.13* 5.31 Jun 14, 2013
Australia 30.817 kW/h plus 91.755 cents per day service fee 6.11 to 11.06 Aug 23, 2012 [8][9]
Bangladesh 2.95 to 9.24 Mar 13, 2014 [10]
Belgium 29.08 8.08 Nov 1, 2011 [11][12]
Bhutan 1.88 to 4.40 0.52 to 1.22 Mar 23, 2012 [13][14]
Bulgaria 16.33 4.54 Jul 1, 2012 [15]
Brazil 16.20 4.5 Jan 1, 2011 [16]
Cambodia 15.63 to 21.00 in Phnom Penh 4.34 to 5.83 Feb 28, 2014 [17][18]
Canada, Ontario 11.17 2010 [19]
Canada, Ontario, Toronto 6.52 to 11.69 depending on time of day plus transmission, delivery, and other charges of about 3.75/kWh 1.81 to 3.25 Feb 9, 2014 [20]
Canada, Quebec 5.41 for the first 30 kWh/day then 7.78 + 40.64/day for subscription fee 2012 [21]
China 7.5 to 10.7 May 17, 2012 [22]
Chile 23.11 Jan 1, 2011 [23][24]
Colombia (Bogota) 18.05 Jun 1, 2013 [25][26]
Cook Islands 34.6 to 50.2 [6]
Croatia 17.55 Jul 1, 2008 [27]
Denmark 40.38 Nov 1, 2011 [11][12]
Dubai 6.26 to 10.35 (plus 1.63 fuel surcharge) [28][29]
Egypt Priced into sections at a kWh/Month, subsidized *

1.24 @ 0-50 kWh/M
2.39 @ 51-100 kWh/M
2.64 @ 0-200 kWh/M
3.96 @ 201-350 kWh/M
5.61 @ 351-650 kWh/M
9.9 @ 651-1000 kWh/M
12.21 @ 1000+ kWh/M

Jul 17, 2014 [30]

[31]

Ethiopia 6.7 to 7.7* Dec 31, 2012 [32]
Fiji 12 to 14.2 [6]
Finland 20.65 Nov 1, 2011 [11][12]
France 19.39 Nov 1, 2011 [11][12]
Germany 36.25 May 1, 2013 [11]
Romania 18.40 Jun 26, 2013 [33]
Guyana 26.80 Apr 1, 2012 [34]
Switzerland 25.00 Jan 6, 2014 [35]
Hungary 23.44 Nov 1, 2011 [11][12]
Hong Kong 12.04 to 24.05 Jan 1, 2013 [36][37]
India 0.1 to 18 (Average 7) Feb 1, 2013 [38]
Indonesia 8.75 Feb 1, 2013 [39][40]
Iceland 9 to 10 Jun 1, 2012 [41][42]
Iran 2 to 19 Jul 1, 2011
Ireland 28.36 Nov 1, 2011 [11][12]
Israel 18* Jun 1, 2013 [43]
Italy 28.39 Nov 1, 2011 [11][12]
Jamaica 44.7 Dec 4, 2013 [44][45]
Japan 20 to 24 Dec 31, 2009 [46][47]
Jordan 5* to 33 Jan 30, 2012 [48]
Kiribati 32.7 [49]
Korea (South) 5.50 to 52.2 Jan 14, 2013 [50]
Kuwait 1 Jun 1, 1966 [51][52]
Laos 11.95 for >150kWh, 4.86 for 26-150 kWh, 4.08 for 0-25 kWh Feb 28, 2014 [53][54]
Latvia 18.25 Jun 1, 2012 [55][56]
Lithuania 19.27 Jan 1, 2013 [57][58]
Macedonia 4 to 7 Aug 1, 2013 [59]
Malaysia 7.09 to 14.76 Apr 1, 2013 [60]
Marshall Islands 29.2 to 36.5 [6]
Mexico 19.28** Aug 22, 2012 [61][62]
Moldova 11.11 Apr 1, 2011 [63]
Myanmar 3.6 Feb 28, 2014
Nepal 7.2 to 11.2 Jul 16, 2012 [64]
Netherlands 28.89 Nov 1, 2011 [11][12]
New Caledonia 26.2 to 62.7 [6]
New Zealand 19.15 Apr 19, 2012
Nicaragua Priced into a sliding scale at a kWh/Month, * Residential T-0

10 @ 0-25 kWh/M
21 @ 26-50 kWh/M
22 @ 51-100 kWh/M
29 @ 101-150 kWh/M
27 @ 151-500 kWh/M
43 @ 501-1000 kWh/M
48 @ 1000+ kWh/M

Sep 1, 2014 [65]
Niue 44.3 [49]
Nigeria 2.58 to 16.55 Jul 2, 2013 [66]
Norway 15.9 Jul 25, 2013
Pakistan 2.00 to 15.070 May 16, 2012 [67]
Palau 22.83 [49]
Papua New Guinea 19.6 to 38.8 [6]
Paraguay 8 2011 [68]
Perú 10.44 2007 [69][70]
Philippines 36.13 Dec 6, 2013 [71]
Portugal 25.25 Nov 1, 2011 [11][12]
Russia 2.4 to 14 Oct 2, 2013 [72]
Saudi Arabia 1.3 for the first 2,000 kWh/month then to 6.9 Oct 28, 2000 [73]
Serbia 3.93 to 13.48**** Feb 28, 2013 [74]
Singapore 20.88 Oct 1, 2013 [75]
Spain 22.73 Jul 1, 2012 [76]
Solomon Islands 88 to 99 [77]
South Africa 8 to 16***** Nov 5, 2012 [78]
Surinam 3.90 to 4.84 Nov 20, 2013 [79]
Sweden 27.10 Nov 1, 2011 [11]
Tahiti 25 to 33.1 [6]
Taiwan 7 to 17 Jun 1, 2012 [80]
Thailand 6 to 13 July 1, 2013 [81]
Tonga 47 Jun 1, 2011 [6]
Turkey 12.57 18.63 Feb 4, 2014 [82]
Turks and Caicos Islands 48.99 Oct 24, 2013
Tuvalu 36.55 [49]
Ukraine 2.6 to 10.8 2014 [83][84]
United Kingdom 20.0 Nov 30, 2012 [11][12]
United States 8 to 17 ; 37*** Sep 1, 2012 [85][86]
United States Virgin Islands 50.8 to 54.8 Mar 31, 2013 [87]
Uruguay 17.07 to 26.48 Feb 11, 2014 [88]
Uzbekistan 4.95 2011 [89]
Vanuatu 20 to 52 [6]
Venezuela 3.1 at Official exchange rate ( 6.3 Bs/US$) or 0.48 cents at unofficial exchange rate (40 Bs/US$) [90]
Vietnam 6.20 to 10.01 2011 [91]
Western Samoa 30.5 to 34.7 [6]

* Denotes countries with government subsidized electricity tariffs.[92][93][94]

** Mexico has subsidized electricity tariffs according consumption limits, more than 500kWh consumed bimonthly meet no subsidies. This tariff correspond to less expensive "tariff 1" (less than 150kWh).[95]

*** Hawaii.

**** Prices don't include VAT (20%).

***** Prices to consumers are often much higher because municipalities add a significant markup.

The U.S. Energy Information Administration (EIA) also publishes an incomplete list of international energy prices, while the International Energy Agency (IEA) provides a thorough, quarterly review for purchase.

Forecasting[edit]

Electricity price forecasting is simply the process of using mathematical models to predict what electricity prices will be in the future.

Forecasting methodology[edit]

The simplest model for day ahead forecasting is to ask each generation source to bid on blocks of generation and choose the cheapest bids. If not enough bids are submitted, the price is increased. If too many bids are submitted the price can reach zero or become negative. The offer price includes the generation cost as well as the transmission cost along with any profit. Power can also be sold or purchased from adjoining power pools.[96][97][98]

Wind power and solar power, being non-dispatchable, is normally taken before any other bids, and at a pre-determined rate for each supplier. Any excess is sold to another grid operator, or stored, using pumped-storage hydroelectricity, or in the worst case, curtailed.[99] The HVDC Cross-Channel line between England and France is bidirectional, but is normally used to capacity to purchase power from France. Allocation is done by bidding.[100]

Driving factors[edit]

In addition to the basic production cost of electricity, electricity prices are set by supply and demand.[101] Everything from salmon migration to forest fires can affect current and future power prices.[citation needed] However, when forecasting those prices there are some fundamental drivers that are the most likely to be considered.[citation needed]

Power Quality[edit]

In modern world, transmission, production and consuming Electric Power associated with excessive Total Harmonic Distortions (THD) and not unity Power Factor (PF) would be costly for owners. Cost of PF and THD impact difficult to estimate, but it cause heat and vibration, malfunctioning and even meltdowns. Usually electric company monitors the situation at transmission level, and it is difficult to predict or model at consuming level. A spectrum of Compensation devices [102] mitigate at some level bad outcome, but a true improvements would be achieved only with real time Correction devices (old style switching type [103] modern low speed DSP driven [104] and near real-time [105]). Most modern devices reducing a wide range problems, while maintain short ROI and significant reduction of ground currents. Another reason to mitigate the problems is to lower cost of operation and generation of the electric energy, which commonly done by Electric Power Distribution companies in conjunction with a Generation companies. Power Quality out of unity would cause a serious erroneous responses from all kind of analog and digital equipment, where the response unpredictable.

Phase Balancing[edit]

Currently most common distribution network and generation of Electrical Power done with 3 phase structures, where special attention paid to the phase balancing and as results reduction of ground current. It is true to an Industrial or commercial network where is most power used in 3 phase machines, but light commercial and residential users would not have a real-time capabilities to do a phase balancing. Often this issues lead to unexpected equipment behavior or malfunctions and in most extreme cases could catch fire. For example, sensitive professions analog or digital recording equipment always need to be connected to well balanced and well grounded Power Networks. To determine and mitigate the cost of the unbalanced Electric Network, electric companies in most cases charge by demand or as separate category for heavy dis-balanced loads. There is a few simple techniques available for the balancing,[106] but in dynamic world of demanding loads would be difficult to do it without fast computing and real-time modeling.

Weather driven demand[edit]

Studies show that generally demand for electricity is driven largely by temperature. Heating demand in the winter and cooling demand (air conditioners) in the summer are what primarily drive the seasonal peaks around the year in most regions. Heating degree days and cooling degree days help measure energy consumption by referencing the outdoor temperature above and below 65 degrees Fahrenheit, a commonly accepted baseline.[107]

Hydropower availability[edit]

Snowpack, streamflows, seasonality, salmon, etc. all affect the amount of water that can flow through a dam at any given time. Forecasting these variables allows one to predict the available potential energy for a dam for a given period.[108] Some regions such as the Pacific Northwest get a large percentage of their generation from hydro-electric dams.

Power plant and transmission outages[edit]

Whether planned or unplanned, outages affect the total amount of power that is available to the grid.[citation needed]

Fuel prices[edit]

The fuel used to generate electricity at a power plant is the primary cost incurred by electrical generation companies. Particularly, coal, as a fuel for baseload plants and more important, to a degree, natural gas for peaking plants affect power prices.[109] This will change as more renewable energy is used, when the capital cost will be the primary cost, as renewable energy (other than biomass and biofuel) has no fuel cost.

Economic health[edit]

During times of economic hardship, many factories will cut back their production due to a reduction of consumer demand and therefore reduce production-related electrical demand.[110]

See also[edit]

References[edit]

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  110. ^ "Demand Forecasting for Electricity". Body of Knowledge on Infrastructure Regulation. Retrieved 2010-01-24. 

External links[edit]