Conditional-robust-profit-based optimization model for electricity retailers with shiftable demand

Qi Zhang, Shaohua Zhang, Xian Wang, Xue Li, Lei Wu

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

This paper investigates the problem of how to deploy customers' shiftable load (SL) for electricity retailers' risk management under uncertainty of the day-ahead (DA) wholesale market price. The robust profit (RP) and the conditional robust profit (CRP) are introduced for a risk-averse retailer's risk-reward trade-off analysis in its decision-making of electricity procurement from various options. A CRP-based bi-level optimization model is proposed for the risk-averse retailer to determine its electricity procurement strategy taking into consideration customers' shiftable load. In the upper problem, the retailer decides its electricity procurement from various options and the SL incentive prices to maximize its CRP under a given confidence level, and in the lower problem, the customers shift their load according to the SL incentive prices to minimize their comprehensive costs including the discomfort cost caused by rescheduling electricity consumption. Finally, a case study is used to verify the effectiveness of this model. It is shown that the retailer can achieve larger profit and less risk by utilizing customers' SL and the retailer's risk-aversion level has an important impact on its electricity procurement and SL incentive strategies.

Original languageEnglish
Article number1308
JournalEnergies
Volume13
Issue number6
DOIs
StatePublished - 2 Mar 2020

Keywords

  • Conditional robust profit
  • Electricity procurement
  • Risk management
  • Risk-averse retailer
  • Shiftable load

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