Influence of Demand Side Management and Multi Year Tariff Order Pricing Model on Energy Management and Its Sustainability in Nigeria Power Systems

Abstract

The persistent growth of unserved load and rising customer dissatisfaction in the Nigerian Electricity Supply Industry (NESI) underscore the urgent need for improved energy management strategies. This may not be unconnected to the major causes of frequent power interruptions in the network and stabilizing the network to avoid these frequent power interruptions, efficient energy management response on the consumers’ side and cost reflective system on the part of energy governance are required to manage the available power supply with the current energy demand by the consumers to attain energy sufficiency and sustainability in the Nigeria grid. Efficient energy policies are formulated to ensure better service delivery and cost reflectivity in the system; of which Demand Side Management (DSM) and Multi-Year Tariff Order (MYTO) pricing model were veritable tools to actualize energy efficiency and sustainability.  Therefore, the study evaluates the influence of DSM and the MYTO pricing model on energy efficiency and cost reflectivity within Nigeria’s power systems especially the DisCos. The marginal cost and marginal revenue concepts and the advanced load shifting technique were used to manage the energy demand with the available power supply using the demand response and cost reflectivity systems to make the available energy sustainable for efficient operation of the grid. The advanced load shifting technique optimized by Binary Particle Swarm Optimization (BPSO) and a detailed cost component analysis in the MYTO framework reveals that DSM implementation reduce peak load up to 15% and decrease energy deficits by approximately 12%. Furthermore, adjustments in the MYTO pricing model led to a 10% improvement in cost reflectivity, thereby enhancing revenue collection and operational sustainability.