Time‐phased electricity package design for electricity retailers considering bounded rationality of consumers

Abstract

The ever‐increasing competition in electricity retail markets has become one of the pivotal causes for electricity retailers to provide attractive packages to consumers for enhancing their market shares. Based on the current user‐side time‐of‐use electricity price mechanism in China, a bi‐level optimization model for designing a time‐phased and quantity‐incentive electricity package is proposed for electricity retailers considering bounded rationality of consumers. In the upper‐level model, the optimization objective is to maximize the electricity purchase and sale revenue of a specified retailer. In the lower‐level model, consumers are modelled as bounded rational decision‐makers whose objective is to purchase the electricity package with the highest value, considering the value of the excess electricity of the package. In addition, consumer psychology theory is introduced to describe the bounded rational responses of consumers to electricity packages. Simulations based on data of residential consumers in a city of China illustrate that by properly determining package quotas in different time periods, electricity retailers can guide consumers to change consumption time and volume, and hence, increase their revenues by increasing trading volume or reducing electricity procurement costs in forward bilateral transactions and spot markets.

Towards transactive energy: An analysis of information‐related practical issues

“…In a Stackelberg game, the operator moves first to determine the energy prices with anticipation of prosumers' reactions and the prosumers follow to decide on the quantities. Prior work along this line spans applications in microgrids with renewable generators [28][29][30], electricity retail markets [31], multi-energy systems [32] etc. In a coalition game, a centralized optimization problem is first solved to determine the buying or selling quantities of the prosumers.…”

Towards Transactive Energy: An Analysis of Information-related Practical Issues

“…In a Stackelberg game, the operator moves first to determine the energy prices with anticipation of the prosumers' reactions and the prosumers follow to decide on the quantities. Prior work along this line spans applications in microgrids with renewable generators [26][27][28], electricity retail markets [29], multi-energy systems [30], etc. In a coalition game, a centralized optimization problem is first solved to determine the buying or selling quantities of the prosumers.…”

Monthly load forecasting for China’s delegate power purchase mechanism considering customer churn

“…However, compared with the system-level load forecasting, the load forecasting for electricity retail pays more attention to the energy consumption of each user. Affected by retail competition and the high switching rate of users to retailers [12], the long-term load forecasting of electricity retailers is quite difficult.…”