Power Trading Strategy and Risk Management for Electricity Retailers Considering Interruptible Load

Abstract

With the implementation of the China’s power system reform, more and more social capitals have entered the electricity market, and the competition in the market has also gotten fiercer. The electricity retailers need to fully mobilize their consumer’s demand response capabilities to increase operating efficiency and reduce the risk of purchasing and sales electricity. This paper introduces an interruptible load (IL) project during the power purchasing and sales business. A bi-level optimization model for retailer’s trading strategy and risk management is proposed. The upper level is to maximize the Conditional_value_at_risk (CVaR) considering the retailer’s profit and business risk, and the lower level is to maximize the consumer satisfaction. The case studies show that the electricity retailer should formulate a four-segment interruptible load contract, encourage their customers to choose as many compensational options as possible and take consumer satisfaction into full consideration. The proposed strategy will help retailers to gain more market share and enhance the competitiveness of the company.