A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use Pricing
This paper establishes a short-term decision model, based on robust optimization, for an electricity retailer to determine the electricity procurement and electricity retail prices. The electricity procurement process includes purchasing electricity from generation companies and from the spot market...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2018-11-01
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| Series: | Energies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/1996-1073/11/12/3258 |
| _version_ | 1811185097849700352 |
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| author | Feihu Hu Xuan Feng Hui Cao |
| author_facet | Feihu Hu Xuan Feng Hui Cao |
| author_sort | Feihu Hu |
| collection | DOAJ |
| description | This paper establishes a short-term decision model, based on robust optimization, for an electricity retailer to determine the electricity procurement and electricity retail prices. The electricity procurement process includes purchasing electricity from generation companies and from the spot market. The selling prices of electricity for the customers are based on time-of-use (TOU) pricing which is widely employed in modern electricity market as a demand response program. The objective of the model is to maximize the expected profit of the retailer through optimizing the electricity procurement strategy and electricity pricing scheme. A price elasticity matrix (PEM) is adopted to model the demand response. Also, uncertainty in spot prices is modeled using a robust optimization approach, in which price bounds are considered instead of predicted values. Using a robust optimization approach, the retailer can adjust the level of robustness of its decisions through a robust control parameter. A case study is presented to illustrate the performance of the model. The simulation results demonstrate that the developed model is effective in increasing the expected profit of the retailer and flattening the load profiles of customers. |
| first_indexed | 2024-04-11T13:24:58Z |
| format | Article |
| id | doaj.art-918be43d5bc147bd9d1627e0fe2bfe60 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-04-11T13:24:58Z |
| publishDate | 2018-11-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-918be43d5bc147bd9d1627e0fe2bfe602022-12-22T04:22:07ZengMDPI AGEnergies1996-10732018-11-011112325810.3390/en11123258en11123258A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use PricingFeihu Hu0Xuan Feng1Hui Cao2School of Electrical Engineering, Xi’an Jiaotong University, Xi’an 710049, ChinaSchool of Electrical Engineering, Xi’an Jiaotong University, Xi’an 710049, ChinaSchool of Electrical Engineering, Xi’an Jiaotong University, Xi’an 710049, ChinaThis paper establishes a short-term decision model, based on robust optimization, for an electricity retailer to determine the electricity procurement and electricity retail prices. The electricity procurement process includes purchasing electricity from generation companies and from the spot market. The selling prices of electricity for the customers are based on time-of-use (TOU) pricing which is widely employed in modern electricity market as a demand response program. The objective of the model is to maximize the expected profit of the retailer through optimizing the electricity procurement strategy and electricity pricing scheme. A price elasticity matrix (PEM) is adopted to model the demand response. Also, uncertainty in spot prices is modeled using a robust optimization approach, in which price bounds are considered instead of predicted values. Using a robust optimization approach, the retailer can adjust the level of robustness of its decisions through a robust control parameter. A case study is presented to illustrate the performance of the model. The simulation results demonstrate that the developed model is effective in increasing the expected profit of the retailer and flattening the load profiles of customers.https://www.mdpi.com/1996-1073/11/12/3258robust optimizationdemand responseelectricity procurementspot markettime-of-use (TOU) pricing |
| spellingShingle | Feihu Hu Xuan Feng Hui Cao A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use Pricing Energies robust optimization demand response electricity procurement spot market time-of-use (TOU) pricing |
| title | A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use Pricing |
| title_full | A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use Pricing |
| title_fullStr | A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use Pricing |
| title_full_unstemmed | A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use Pricing |
| title_short | A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use Pricing |
| title_sort | short term decision model for electricity retailers electricity procurement and time of use pricing |
| topic | robust optimization demand response electricity procurement spot market time-of-use (TOU) pricing |
| url | https://www.mdpi.com/1996-1073/11/12/3258 |
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