1019 / 2019-05-15 15:50:36

IGDT-based Robust Procurement Strategy for Electricity Retailers with incentive-based Demand Response Capability

energy procurement,incentive-based DR,load shifting,information gap decision theory

Customer's demand response (DR) can help electricity retailers to manage their risks caused by severe uncertainty in the day-ahead (DA) wholesale market prices. In this paper, a bi-level robust optimization model for risk-averse retailers’ energy procurement strategy is proposed taking into considerations of the incentive-based DR. To evaluate the financial risk arising from severely uncertain DA prices, the information-gap decision theory (IGDT) based approach is adopted for the risk-averse retailer to decide the electricity procurement strategy and DR incentive prices in the upper problem. In the lower problem, the customers shift their load according to the incentive prices. The model can help the retailer resist the largest fluctuation level of the DA market price while ensuring the expected profit. The effectiveness of the model is verified by a case study.