Residential electricity pricing in China: The context of price-based demand response

As a secondary energy, electricity is an important channel between original energy and energy consumers. Electricity price is a critical factor for the interests of all involvers in the electric power market. It also plays an important role for the sustainable development of energy and environment. Smart grid is a new conception proposed in recent years to improve the intelligent level and increase the efficiency of electric power system operation. Smart grid combines and integrates information technology, communication technology and intelligent control technology with tradition power system. To achieve the many objectives of smart grid, Demand response (DR), as an effective technique of demand side management (DSM), refers to the changes in electricity consumption behavior of users in response to the dynamic price or incentive rewards. Price based demand response (PBDR) is one of the two major DR programs. In this paper, we first introduce the pricing theories in economics, the pricing of electricity and the development of electricity pricing in China. Then, we present a detailed discussion on the PBDR strategies in the DSM of smart grid. Also, the research status of PBDR is reviewed. Finally, it gives a summary of the whole paper in the last Section.