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Impacts of time-varying electricity rates on forward contract scheduling of DisCos

Safdarian, A ; Sharif University of Technology

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  1. Type of Document: Article
  2. DOI: 10.1109/TPWRD.2013.2277211
  3. Abstract:
  4. Time-varying electricity rates enable demand-side potentials, which provide an opportunity for distribution companies (DisCos) to hedge against the financial risk imposed by volatile spot market prices and uncertain customers' load. In particular, time-varying rates can be effective alternatives for at least a portion of costly forward contracts. This paper establishes a stochastic framework to determine optimal forward market purchases under time-varying rates. Various electricity rating strategies with different time intervals covering flat, time-of-use, and real-time pricing schemes are considered. The objective of the framework is to maximize DisCo's expected profit while the exposure risk is restricted to a predetermined level. The risk is modeled using the conditional value at risk approach. The elastic behavior of demand is taken into account via the price elasticity matrix model. The proposed framework is formulated as a mixed-integer linear programming problem which can be easily solved through commercially available solvers. The effectiveness of the developed methodology is examined through comprehensive case studies based on real data from Finland. A detailed comparison on the scheduling of forward contracts under different rating strategies is also provided
  5. Keywords:
  6. Demand response ; Distribution company ; Forward contract scheduling ; Risk management ; Stochastic programming ; Time-varying electricity rate ; Commerce ; Elasticity ; Industry ; Linear programming ; Scheduling ; Conditional Value-at-Risk ; Forward contract ; Mixed integer linear programming ; Price elasticity matrixes ; Stochastic framework ; Time varying ; Electricity
  7. Source: IEEE Transactions on Power Delivery ; Vol. 29, issue. 2 , 2014 , p. 733-741 ; ISSN: 8858977
  8. URL: http://ieeexplore.ieee.org/xpl/login.jsp?tp=&arnumber=6585765&url=http%3A%2F%2Fieeexplore.ieee.org%2Fxpls%2Fabs_all.jsp%3Farnumber%3D6585765