A curve decomposition strategy for medium-to-long term contract energy of market-based customers considering price uncertainty in spot market

Abstract

As China’s electricity market reform progresses， market-based customers can not only participate in medium-to-long-term markets but also engage in the spot market based on their electricity procurement needs. The decomposition strategy for long-term contract energy is directly related to electricity purchasing decisions in the spot market. To rationalize curve decomposition of medium-to-long-term energy of market-based customers and reduce their overall electricity costs， this paper proposes a curve decomposition strategy for medium-to-long term contract energy of market-based customers considering price uncertainty in spot market. Drawing upon information gap decision theory （IGDT）， it proposes two types of uncertainty analysis models—risk-averse models and risk-seeking models—to establish a quantitative relationship between the total electricity costs of market-based customers and the accuracy of spot market price predictions. Case study results demonstrate that the proposed strategy can effectively support energy decomposition decisions for customers while considering price uncertainty in spot market.

Keywords

• price uncertainty in spot market
• energy contract decomposition
• igdt
• risk-averse model
• risk-seeking model