Risk‐based retailer profit maximization: Time of Use price setting for elastic demand

Abstract

Summary Retailers in electricity markets face challenges of hourly varying energy prices and consumers' elastic demand. Besides these challenges, utilization of high renewable energy (RE) self‐generation such as solar energy could significantly affect energy procurement and sale prices decisions of a retailer. A retailer with RE self‐generation makes decisions targeting best utilization of RE availability, to maximize its profit. However, a retailer without RE makes decisions considering energy prices and elastic demand. In this perspective, this paper determines optimal Time of Use (ToU) sale prices to be offered and optimal energy procurement portfolio, for a retailer with and without RE, considering elastic demand and wholesale market price uncertainty, aiming to maximize retailer's profit. Case study considers three consumer classes to examine risk neutral and risk averse behavior of a retailer. Results illustrate impact of multiple consumer class behavior on ToU price, procurement strategy, and risk preferences of a retailer.

Integrated TOU price‐based demand response and dynamic grid‐to‐vehicle charge scheduling of electric vehicle aggregator to support grid stability

“…Thus, there is not at all possibility for EV owners to swap to a different EVA due to weak competition, information scarcity, and switching complexity. 52 Thus, modelling competition is beyond the scope of the paper. Furthermore, EVA is assumed as price-taker for energy and regulation market participation and submits only quantity demand/supply in them.…”

“…EVA, aiming at its profit maximization, executes TOU‐PBDR and conveys the EV owner a price motivation to adapt its consumption to off‐peak price hours of the day. Thus, there is not at all possibility for EV owners to swap to a different EVA due to weak competition, information scarcity, and switching complexity 52 . Thus, modelling competition is beyond the scope of the paper.…”