Impact of Revised Time of Use Tariff on Variable Renewable Energy Curtailment on Jeju Island

Abstract

Jeju Island announced the “Carbon Free Island (CFI) Plan by 2030” in 2012. This plan aims to replace conventional generators with distributed energy resources (DERs) up to a level of 70% by 2030. Akin to Jeju Island, as DERs have been expanded in islanded power systems, variable renewable energy (VRE) has become a significant component of DERs. However, VRE curtailment can occur to meet power balance, and VRE curtailment generally causes energy waste and low efficiency, so it should be minimized. This paper first presents a systematic procedure for estimating the annual VRE curtailment for the stable operation of the islanded power systems. In this procedure, the VRE curtailment is estimated based on the power demand, the grid interconnection, the capacity factor of VRE, and conventional generators in the base year. Next, through the analysis of the hourly net load profile for the year in which the VRE curtailment is expected to occur, a procedure was proposed to find the season and hour when VRE curtailment occurs the most. It could be applied to revised Time-of-Use (ToU) tariff rates as the most cost-effective mitigation method of VRE curtailment on the retail market-side. Finally, price elasticity of electricity demand was presented for applying the revised ToU tariff rate scenarios in a specific season and hour, which found that VRE curtailment occurred the most. Considering self- and cross-price elasticity of electricity, revised ToU tariff rate scenarios were used in a case study on Jeju Island. Eventually, it was confirmed that VRE curtailment could be mitigated when the revised ToU tariff rates were applied, considering the price elasticity of demand.