Optimal critical peak pricing scheme with consideration of marginal generation cost

Thailand's electricity generation system has to rely on expensive Liquefied Natural Gas (LNG) to generate electricity. Therefore, Thailand plans to use Critical Peak Pricing (CPP) scheme to mitigate this energy crisis. This paper proposes a methodology to determine an optimal CPP scheme for Thailand with consideration of marginal generation cost. Optimal critical peak price is calculated by maximizing social welfare, while peak and off-peak discount rate are calculated based on Revenue Neutral method to incentivize customers. Linear Demand Response model is used to predict electricity consumption behavior. Optimization problem is solved by quadratic programming using MATLAB. The obtained results show that critical peak price will maximize social welfare while peak and off-peak price are considerable for customers.