Integrating wholesale and retail electricity markets considering financial risks using stochastic programming. (November 2022)

• Record Type: Journal Article
• Authors: Bagheri, Abed; Jadid, Shahram
• Is Part Of: International journal of electrical power & energy systems. Volume 142:Part A(2022)
• Publication Date: 2022-11
• Subjects: Decentralized optimization -- Electricity market -- Risk management -- Two-stage stochastic programming -- Uncertainty; Electrical engineering -- Periodicals; Electric power systems -- Periodicals; Électrotechnique -- Périodiques; Réseaux électriques (Énergie) -- Périodiques; Electric power systems; Electrical engineering; Periodicals; 621.3
• DOI: 10.1016/j.ijepes.2022.108213
• Languages: English
• ISSNs: 0142-0615

Abstract

Abstract: The prevalent paradigm of power system operations has mostly centered on placing all the intelligence in resources that are connected to transmission networks, whereas distribution grids are often not accounted for in-depth and put aside by only approximating some limited behaviors. Nonetheless, proliferation of distributed energy resources, e.g. solar panels and wind turbines, in the distribution networks, combined with a significant amount of load uncertainties in different consumption sectors, necessitates the integration of a significant amount of intelligence at the distribution level of electric power systems. Hence, distribution system operators are becoming more involved in the operation of electric power systems and electricity markets. This paper opens a branch of knowledge for simultaneously clearing wholesale and retail electricity markets relying on (i) a fully-decentralized algorithm able to simultaneously run by all system operators, preserving privacy aspects of all market players and data security over the whole system, (ii) considering inherent uncertainty of electricity generation of renewable units and power consumption of customers using a stochastic programming approach, (iii) modeling and analyzing financial risk of the uncertain parameters and their effects on all parts of the system. Results obtained from software simulations indicate the high ability of the proposed structure in making integrated electricity markets with maximum performance and efficiency considering numerous limitations in the system. Highlights: A fully decentralized solution for integrating wholesale and retail markets. The framework is compatible with the rules enacted by the EU's Third Energy Package. The optimal solution of the theoretical centralized model without central coordinator. The proposed algorithm does not need to be solved until the global optima. The market-clearing structure allows all marketplace individuals to share assets.