This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.


Simulation of residential tariffs, per kW demand

Rafael Herzberg's picture
Consultant energy affairs, Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

  • Member since 2003
  • 2,219 items added with 1,294,522 views
  • Sep 16, 2020

Simulation of residential tariffs, per kW demand

My suggestion is changing in the format of home tariffs,to better reflect of what really happens!

Instead of charging the kWh consumption, charge for the required demand of the grid, in kW.

This demand would be integrated in 15 minutes. It would reflect the amortization of investments in installed capacity to serve the customer, which is, in fact, the main intrinsic cost component of the electric power sector.

To illustrate, assuming the reality of the amortization of investment in generation, transmission and distribution to the customer's home, the tariff would be R$ 150/kw/ month (USD 30/kW/month) - of course in ballpark numbers!

A house that registered a demand of 3 kW would pay USD 90 on that month.

Today, a customer that records 6 kW of demand and another that records 3 kW - both consuming the same volume in the month, for example 400 kWh, would pay exactly the same, although the investments made by the electric power sector are widely different!

Dr. Amal Khashab's picture
Dr. Amal Khashab on Sep 16, 2020


Suppose you start your tankless hot water for 2 minutes, the recorded KW will be 5KW for 15 minutes means that you will be charged for 1.25KWh.

Actually you consumed 0.1334 KWH.


Rafael Herzberg's picture
Rafael Herzberg on Sep 17, 2020

Hi Amal,

The 15-min-interval is for kW demand. 

Let's say, after your example, that you use 5 kW for 2 minutes.

The integrated demand will be 5 kW x 2 min/15 min or about 0,7 kW. This is the value that will be confronted with all 15-min kW demand intervals of that month. If this is the maximum, then it will be used to bill the customer.

The charge will be the demand rate in $/kW multiplied by the maximum integrated 15-min-intervals of that month. 

It is not about charging by kWh consumption. It is a different "animal" as compared to the current system.

Rafael Herzberg's picture
Thank Rafael for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »