A Short-Term Decision Model for Electricity Retailers: Electricity Procurement and Time-of-Use Pricing

Abstract

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.

Conditional-Robust-Profit-Based Optimization Model for Electricity Retailers with Shiftable Demand

“…Recently, increasing attention has been devoted to the development of decision-making strategies for electricity retailers taking DRPs into consideration. In [27], the energy procurement and TOU pricing strategies of a retailer are specified while the RO method is used for risk menagement under spot market price uncertainty. In [28], a two-stage two-level model for the energy pricing and procurement problem faced by a retailer is proposed.…”

“…The comprehensive cost function C k of customer k is shown in objective function (27) which includes the cost of purchasing electricity from the retailer, discomfort cost caused by load shifting and the SL payments received from the retailer. Each customer aims to minimize his comprehensive cost C k after load shifting.…”

Statistical Learning for Service Quality Estimation in Broadband PLC AMI

“…On the other hand, the purpose of the LP metering lies in gathering other information about energy consumption. The TOU pricing is a method to reflect the cost of producing electricity, which varies hourly on a day [4]. For the TOU pricing to be in service, the TOU data need to be downloaded to each meter.…”

“…Utilities employ AMI to operate a variety of services and applications, such as meter reading of smart meters, remote management of smart meters, demand response (DR), provision of power information to the customer, and power distribution management [1]. From DR through AMI, the utilities can provide consumers with a variety of optional pricing rate information, such as the time-of-use (TOU), critical peak pricing, and real-time pricing, and can allow consumers to choose a reasonable pricing rate based on their power usage patterns [2][3][4].…”

Non-Price Criteria for the Evaluation of the Tender Offers in Public Procurement of Ukraine

“…Public sector procurement is increasingly seen as an important instrument for inducing innovation in the private sector (Lenderink et al 2019). Sustainable public procurement is a powerful tool to reflect on national strategic intentions and promote scientific and technological innovation (Hu et al 2018;Wang et al 2018aWang et al , 2018bJobidon et al 2018;Ivashova and Ivashov 2019, p. 327).…”