Results in Engineering (Dec 2022)
Electricity retail market and accountability-based strategic bidding model with short-term energy storage considering the uncertainty of consumer demand response
Abstract
Electricity retailers participate in electricity markets as intermediaries between wholesale and retail markets. They acquire energy on the wholesale side by participating in next-day markets and the pool of power. On the retail side, they make contracts with consumers in order to meet their energy demand at a fixed price for a set period of time –generally a year. To maximize profit in planning, a retailer must choose the best strategy, which should be able to reduce the cost of purchasing energy in the wholesale market while simultaneously determining the best selling price for consumers. Customers may choose a different retailer if the selling price is too high, and the retailer may take a loss if the price is too low. One of the issues that complicate retailers’ decision is the uncertain demand response parameters that affect profit. This paper contributes with a strategic bidding model for planning with short-term energy storage while considering the uncertainty of consumer demand response and load response programs simultaneously. GAMS and MATLAB are implemented in this research to analyze the data and review the results, which indicate that an increase in profit is expected to be greater than when the retailer uses only a load response program or a short-term energy storage system. As uncertainty grows, so does local price sensitivity, and, as a result, so does the predicted rate of profit. Profits from participatory reservation, energy, and regulation markets increase in the robust model, while profits from the common participatory market decrease, i.e., according to this study, which looked at both probabilistic and robust models of retail market participation. When a robust model is used, the overall profit is higher than that obtained from a probabilistic model.
