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Integrated Demand Response programs and energy hubs retail energy market modelling

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  • Aghamohammadloo, Hossein
  • Talaeizadeh, Valiollah
  • Shahanaghi, Kamran
  • Aghaei, Jamshid
  • Shayanfar, Heidarali
  • Shafie-khah, Miadreza
  • Catalão, João P.S.

Abstract

The present research aims to formulate competition in a retail energy market in the presence of an Integrated Demand Response (IDR) program to reduce prosumer costs and increase retailer profits. This gives prosumers more degrees of freedom to reduce their energy costs. The retail energy market includes retailers and prosumers equipped with an energy hub containing a boiler for producing heat and combined heat and power (CHP). Retailers aim to maximize profit, whereas prosumers seek to minimize their costs. Hence, a multi-leader-follower game with a bi-level program emerges in which the upper level deals with the profit maximization of each retailer while the lower level considers the cost minimization of each prosumer. The strategic behaviour of each retailer is modelled as a Mathematical Program with Equilibrium Constraints (MPEC) problem. Simultaneously solving all MPECs, which leads to an Equilibrium Problem with Equilibrium Constraints (EPEC), determines the market equilibrium point. The equilibrium point is achieved using mathematical, analytical methods and linearization of nonlinear constraints by accurate techniques. Two different case studies are developed to investigate how the number of retailers influences the market equilibrium point. The first case includes two retailers, while the second case considers an increase in the number of retailers. The results demonstrate that with an increase in retailers' number, their competition increases, causing the prosumers costs to reduce. Furthermore, our results suggest the IDR impact on reduced prosumers cost and increased retailers profit.

Suggested Citation

  • Aghamohammadloo, Hossein & Talaeizadeh, Valiollah & Shahanaghi, Kamran & Aghaei, Jamshid & Shayanfar, Heidarali & Shafie-khah, Miadreza & Catalão, João P.S., 2021. "Integrated Demand Response programs and energy hubs retail energy market modelling," Energy, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:energy:v:234:y:2021:i:c:s0360544221014870
    DOI: 10.1016/j.energy.2021.121239
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    References listed on IDEAS

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    7. Hassan Khazaei & Hossein Aghamohammadloo & Milad Habibi & Mehdi Mehdinejad & Amin Mohammadpour Shotorbani, 2023. "Novel Decentralized Peer-to-Peer Gas and Electricity Transaction Market between Prosumers and Retailers Considering Integrated Demand Response Programs," Sustainability, MDPI, vol. 15(7), pages 1-18, April.
    8. Mehdinejad, Mehdi & Shayanfar, Heidarali & Mohammadi-Ivatloo, Behnam, 2022. "Decentralized blockchain-based peer-to-peer energy-backed token trading for active prosumers," Energy, Elsevier, vol. 244(PA).
    9. Khalili, Reza & Khaledi, Arian & Marzband, Mousa & Nematollahi, Amin Foroughi & Vahidi, Behrooz & Siano, Pierluigi, 2023. "Robust multi-objective optimization for the Iranian electricity market considering green hydrogen and analyzing the performance of different demand response programs," Applied Energy, Elsevier, vol. 334(C).
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    11. Saeian, Hosein & Niknam, Taher & Zare, Mohsen & Aghaei, Jamshid, 2022. "Coordinated optimal bidding strategies methods of aggregated microgrids: A game theory-based demand side management under an electricity market environment," Energy, Elsevier, vol. 245(C).
    12. Seyed Amin Sedgh & Hossein Aghamohammadloo & Hassan Khazaei & Mehdi Mehdinejad & Somayeh Asadi, 2023. "A New Design for the Peer-to-Peer Electricity and Gas Markets Based on Robust Probabilistic Programming," Energies, MDPI, vol. 16(8), pages 1-19, April.
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