Electricity supply chain coordination based on quantity discount contracts

Abstract

Electricity supply chain coordination mechanism from the fuel supply, power generation and transmission to electricity consumption has become an important research topic to ease electric coal supply conflicts. In this paper, based on the quantity discount contracts, the electricity supply chain coordination model is proposed. The model makes the rational decision-making of individual members in the supply chain to achieve the optimal overall performance. With satisfying the power transmission network constraints, the model couples the optimal decision-making of fuel enterprises, power generation enterprises, customers and independent system operator by the quantity discount contracts of fuel procurement prices. Mathematically, it is represented by the multi-layer optimization with the equality and inequality constraints. By using the non-linear complementary function method, the electricity supply chain coordination model is transferred into a set of non-linear algebraic equations, and then the value of quantity discount is obtained which make the individual decision-making achieve optimal supply chain performance.