Risk-Based Two-Stage Stochastic Optimization Problem of Micro-Grid Operation with Renewables and Incentive-Based Demand Response Programs

Sheikhahmadi, Pouria; Mafakheri, Ramyar; Bahramara, Salah; Damavandi, Maziar Yazdani; Catalão, João P.S.

doi:10.3390/en11030610

Cited by 28 publications

(14 citation statements)

References 28 publications

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“…Constraint (17) enforces the maximum and minimum power transaction through bilateral contracts. The supply-demand balance constraint of active and reactive power are presented by (18) and (19), respectively [41]. Finally, the constraints of the retail prices of active power, set by the retailer, are denoted by (20) and (21).…”

Section: Constraintsmentioning

confidence: 99%

Strategic Behavior of Retailers for Risk Reduction and Profit Increment via Distributed Generators and Demand Response Programs

et al. 2018

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Following restructuring of power industry, electricity supply to end-use customers has undergone fundamental changes. In the restructured power system, some of the responsibilities of the vertically integrated distribution companies have been assigned to network managers and retailers. Under the new situation, retailers are in charge of providing electrical energy to electricity consumers who have already signed contract with them. Retailers usually provide the required energy at a variable price, from wholesale electricity markets, forward contracts with energy producers, or distributed energy generators, and sell it at a fixed retail price to its clients. Different strategies are implemented by retailers to reduce the potential financial losses and risks associated with the uncertain nature of wholesale spot electricity market prices and electrical load of the consumers. In this paper, the strategic behavior of retailers in implementing forward contracts, distributed energy sources, and demand-response programs with the aim of increasing their profit and reducing their risk, while keeping their retail prices as low as possible, is investigated. For this purpose, risk management problem of the retailer companies collaborating with wholesale electricity markets, is modeled through bi-level programming approach and a comprehensive framework for retail electricity pricing, considering customers' constraints, is provided in this paper. In the first level of the proposed bi-level optimization problem, the retailer maximizes its expected profit for a given risk level of profit variability, while in the second level, the customers minimize their consumption costs. The proposed programming problem is modeled as Mixed Integer programming (MIP) problem and can be efficiently solved using available commercial solvers. The simulation results on a test case approve the effectiveness of the proposed demand-response program based on dynamic pricing approach on reducing the retailer's risk and increasing its profit.

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Section: Constraintsmentioning

confidence: 99%

Strategic Behavior of Retailers for Risk Reduction and Profit Increment via Distributed Generators and Demand Response Programs

et al. 2018

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“…Conditional value at risk (CVaR) is a coherent risk-measure that has been applied to model the risk-aversion of electricity market participants in many research works ( [8][9][10]25,26]). In this paper, we follow the same approach proposed in [19] that allows computing of CVaR using a set of linear equations.…”

Section: Modelling the Risk-aversion With Cvarmentioning

confidence: 99%

Impact of Risk Aversion on the Operation of Hydroelectric Reservoirs in the Presence of Renewable Energy Sources

et al. 2018

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Abstract:The increasing share of renewable energy sources, such as wind and solar generation, has a direct impact on the planning and operation of power systems. In addition, the consideration of risk criteria within the decision support tools used by market participants (generation companies, energy services companies, and arbitrageurs) is becoming a common activity given the increasing level of uncertainties faced by them. As a consequence, the behavior of market participants is affected by their level of risk aversion, and the application of equilibrium-based models is a common technique used in order to simulate their behavior. This paper presents a multi-stage market equilibrium model of risk-averse agents in order to analyze up to what extent the operation of hydro reservoirs can be affected by the risk-averse profile of market participants in a context of renewable energy source penetration and fuel price volatility.

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“…The authors in ref. [36] studied the risk management topic in electricity and fuel markets. Multidimensional modeling is suggested in ref.…”

Section: Introductionmentioning

confidence: 99%

Optimal Management of an Energy Storage Unit in a PV-Based Microgrid Integrating Uncertainty and Risk

et al. 2019

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This paper addresses an optimized management of a storage energy battery which is part of a microgrid with a connection to the main grid and is supplied by a photovoltaic (PV) power plant. The main contribution of this paper is to consider uncertainty in electricity price while managing the battery storage. The forecasted value for demand and PV unit are predicted by a seasonal autoregressive integrated moving average model (SARIMA)—capable of accurately characterizing both seasonality effects and tail fatness. The optimal operation of the battery is determined by resolving a linear optimization program in which the objective function comprises the conditional value at risk (CVaR). Using CVaR ensures that the demand is fully supplied while minimizing the risk and operational cost. The cost function is the difference between power sold and bought subject to the charging and discharging rates for the battery and defining upper and lower bounds for the level of battery charge. The simulation results confirm that the risk consideration has a significant effect on the optimized management of a storage energy battery in a photovoltaic grid-connected microgrid.

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Risk-Based Two-Stage Stochastic Optimization Problem of Micro-Grid Operation with Renewables and Incentive-Based Demand Response Programs

Cited by 28 publications

References 28 publications

Strategic Behavior of Retailers for Risk Reduction and Profit Increment via Distributed Generators and Demand Response Programs

Strategic Behavior of Retailers for Risk Reduction and Profit Increment via Distributed Generators and Demand Response Programs

Impact of Risk Aversion on the Operation of Hydroelectric Reservoirs in the Presence of Renewable Energy Sources

Optimal Management of an Energy Storage Unit in a PV-Based Microgrid Integrating Uncertainty and Risk

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