Work

The effect of electricity time-of-use plans: Evidence from the industrial sector in China

Year: 2025

Type: article

Abstract: Time-of-use (TOU) pricing plans are crucial energy market mechanisms implemented worldwide. Using a natural quasi-experimental method and hourly electricity data from industrial customers, instead of merely assessing the effectiveness of TOU pricing, this study investigates under which circumstances TOU pricing can effectively contribute to peak shaving and valley filling. Our results show that high-peak-price TOU pricing may induce both peak-shaving and valley-filling effects for large-scale customers, but for small-scale customers, it may induce peak shaving but not valley filling. Conversely, low-peak-price TOU pricing may raise electricity consumption for both large-scale and small-scale industrial customers, regardless of peak or valley periods. Regarding expenditure analysis for the shift from a flat rate to TOU, the study shows a reduction of monthly electricity costs by 6.33% for large-scale industrial customers and 27.15% for small-scale cohorts. Furthermore, high-peak- price TOU pricing significantly enhances demand stability, leading to a 6.2% reduction in the peak-to-valley load ratio.

Source: China Economic Review

DOI: 10.1016/j.chieco.2025.102390

Authors: Lingfang Li, Jiehong Qiu, Gang Fang

Institutions: Fudan University, Horizon Robotics (China)

Language: English

Topic: Smart Grid Energy Management

Subfield: Electrical and Electronic Engineering

Field: Engineering

Domain: Physical Sciences

SDGs: Industry, innovation and infrastructure, Affordable and clean energy

Open Access status: hybrid

Estimated APC paid: $4,380