Time-of-Use Tariff Program in Saudi Arabia: Design, Implementation, and Evaluation

Abstract

In Saudi Arabia, electricity consumption increases substantially during the summer months with residential, commercial and industrial customers accounting for the majority of the high summer load. Although the daily peak period occurs between 1 PM and 5 PM, loads exceeding 95% of the annual peak load only last for 0.3% of the total hours of the year; therefore, they are very expensive to serve. Large industrial and commercial customers are participating with the Saudi Electricity Company (SEC) in a Time-of-Use (TOU) tariff program. The objective of the program is to reduce SEC peak load growth and the associated additional generation and network capacity, and to provide the participating customers with financial and other benefits. SEC started its TOU tariff program in June 2006 in its Central Operating Area (COA) with 26 industrial and 9 commercial customers. In 2007, the program was expanded to its Eastern and Western Operating Areas to include an additional 89 industrial and 20 commercial customers.This paper presents an overall evaluation of the TOU program implementation in the COA of Saudi Arabia through an analysis of the results of field visits to selected customers and technical data obtained from SEC. The paper includes the TOU program description, energy and demand impacts, economic benefits to SEC, and customer bill reductions. Success cases and problems encountered are addressed, and recommendations to strengthen the program are made. Keywords: TOU tariff, Economic benefit, Demand impact, Bill reduction