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Robust bidding and offering strategies of electricity retailer under multi-tariff pricing

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  • Nojavan, Sayyad
  • Zare, Kazem
  • Mohammadi-Ivatloo, Behnam

Abstract

In this paper, an electricity retailer seeks to determine selling price for end-user consumers under fixed pricing (FP), time-of-use pricing (TOU) and real-time pricing (RTP). Furthermore, in order to provide power exchange between the retailer and the power market, bidding and offering curves should be prepared to bid and offer to the day-ahead market. Therefore, this paper proposes a robust optimization approach (ROA) to obtain optimal bidding and offering strategies for the retailer. To achieve this, ROA is used for uncertainty modeling of power market prices in which the minimum and maximum limits of prices are considered for uncertainty modeling. Lower and upper bounds of price is consecutively subdivided into sequentially nested subintervals which allows formulating robust mixed-integer linear programming (RMIP) problem. The proposed RMIP model helps retailer to select a robust decision in the presence of market price uncertainty. Furthermore, the bidding and offering curves of the retailer are obtained from sufficient data through solving these problems. Meanwhile, the uncertainty of customers demand and variable climate condition are modeled based on stochastic programming. To validate the proposed robust optimization model, three case studies are evaluated and the results are compared.

Suggested Citation

  • Nojavan, Sayyad & Zare, Kazem & Mohammadi-Ivatloo, Behnam, 2017. "Robust bidding and offering strategies of electricity retailer under multi-tariff pricing," Energy Economics, Elsevier, vol. 68(C), pages 359-372.
    • Handle: RePEc:eee:eneeco:v:68:y:2017:i:c:p:359-372
    DOI: 10.1016/j.eneco.2017.10.027
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    References listed on IDEAS

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    1. Nojavan, Sayyad & Zare, Kazem & Mohammadi-Ivatloo, Behnam, 2017. "Optimal stochastic energy management of retailer based on selling price determination under smart grid environment in the presence of demand response program," Applied Energy, Elsevier, vol. 187(C), pages 449-464.
    2. Hajati, Maryam & Seifi, Hossein & Sheikh-El-Eslami, Mohamad Kazem, 2011. "Optimal retailer bidding in a DA market – a new method considering risk and demand elasticity," Energy, Elsevier, vol. 36(2), pages 1332-1339.
    3. Khojasteh, Meysam & Jadid, Shahram, 2015. "Decision-making framework for supplying electricity from distributed generation-owning retailers to price-sensitive customers," Utilities Policy, Elsevier, vol. 37(C), pages 1-12.
    4. Conejo, Antonio J. & Contreras, Javier & Espinola, Rosa & Plazas, Miguel A., 2005. "Forecasting electricity prices for a day-ahead pool-based electric energy market," International Journal of Forecasting, Elsevier, vol. 21(3), pages 435-462.
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    Cited by:

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    5. Qi Zhang & Shaohua Zhang & Xian Wang & Xue Li & Lei Wu, 2020. "Conditional-Robust-Profit-Based Optimization Model for Electricity Retailers with Shiftable Demand," Energies, MDPI, vol. 13(6), pages 1-19, March.
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    7. Russo, Marianna & Kraft, Emil & Bertsch, Valentin & Keles, Dogan, 2022. "Short-term risk management of electricity retailers under rising shares of decentralized solar generation," Energy Economics, Elsevier, vol. 109(C).

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