The Impact of Electricity Tariffs on Optimal Production Scheduling

Energy costs can represent a large portion of the total production costs, and therefore, any changes in electricity tariffs can have a significant impact on profitability. This paper analyses how different types of electricity tariffs can affect the scheduling of a case study model, in particular, how time-of-use tariffs and real-time-pricing tariffs affect the single-machine scheduling problem of a production process with the introduction of the energy vector in the optimization cost. The influence of tariffs is examined, and their impact on optimal production scheduling is evaluated from an approach in demand response price-based programs, for ensuring cost-effectiveness while looking at the carbon footprint of the industrial process. The results indicate that the cost improvement of one tariff over the other is not consistent across all time periods. Meanwhile, the carbon footprint is reduced with a real-time-pricing tariff, since the real-time-pricing mechanism and the generation mix of fossil fuel technologies are positively correlated.