Optimal bidding strategy of electricity retailers using robust optimisation approach considering time‐of‐use rate demand response programs under market price uncertainties

In restructured electricity markets, the electricity retailers try to obtain the consumers' electricity demand at the minimum cost of different resources such as self‐generating facilities, bilateral contracts and pool market purchases. Hence, more attention should be paid to the demand respons...

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Bibliographic Details
Published in:IET generation, transmission & distribution Vol. 9; no. 4; pp. 328 - 338
Main Authors: Nojavan, Sayyad, Mohammadi‐Ivatloo, Behnam, Zare, Kazem
Format: Journal Article
Language:English
Published: The Institution of Engineering and Technology 05.03.2015
Subjects:
bilateral contracts
consumer electricity demand
contracts
decision making
demand response programs
DRP effect
Electricity
Electricity pricing
electricity procurement cost reduction
electricity retailers
forecasted prices
integer programming
linear programming
market price uncertainties
Markets
optimal bidding strategy
Optimization
pool market purchase
pool prices
Pools
power markets
price fluctuation
Pricing
procurement
resource minimum cost
restructured electricity markets
RMILP problem
robust mixed‐integer linear programming problem collection
robust optimisation approach
self‐generating facilities
Strategy
successive nested subintervals
time‐based model
time‐of‐use rate demand response programs
total procurement cost
Uncertainty
uncertainty modelling
ISSN:1751-8687, 1751-8695
Online Access:Get full text
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Summary:In restructured electricity markets, the electricity retailers try to obtain the consumers' electricity demand at the minimum cost of different resources such as self‐generating facilities, bilateral contracts and pool market purchases. Hence, more attention should be paid to the demand response programs (DRPs) which aim to electricity procurement cost reduction. Owing to the uncertain nature of pool prices and the price fluctuation in the pool markets, the uncertainty modelling is inevitable for retailers. In this study, a robust optimisation approach is proposed for decision making of electricity retailers. Meanwhile, considering the effect of DRP on total procurement cost, an optimal bidding strategy is proposed of electricity retailers with the time‐based model of DRP in the electricity market. For this purpose, a collection of robust mixed‐integer linear programming (RMILP) problem should be solved in the proposed method. Rather than using the forecasted prices as inputs, the upper and lower limits of pool prices are considered for the uncertainty modelling. The range of pool prices is sequentially partitioned into successive nested subintervals, which permits formulating the RMILP problems. The results of these problems give sufficient data to obtain an optimal bidding strategy for electricity retailers considering DRP. Detailed analysis is performed to delineate the proposed method.
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ISSN:1751-8687
1751-8695
DOI:10.1049/iet-gtd.2014.0548