Designing electricity tariffs in the retail market: A stochastic bi-level approach

Patrizia Beraldi and Sara Khodaparasti

International Journal of Production Economics, 2023, vol. 257, issue C

Abstract: This paper presents a stochastic bi-level approach for tariff design in the electricity market where the leader is represented by a retailer and the follower by a residential prosumager, i.e. a consumer equipped with an energy system consisting of photovoltaic panels and a battery storage device. Both players solve an optimization problem subject to uncertainty in market prices, weather-related variables and electricity demand. To account for the retailer’s attitude towards risk, the upper level problem includes a safety measure to maximize. The model allows to determine a dynamic pricing scheme with time-variant rates delivering the average profit that can be gained in a given percentage of unfavorable realizations of the uncertain parameters and the optimal load pattern that minimizes the expected prosumager’s electricity bill.

Keywords: Dynamic electricity tariffs; Bi-level optimization; Uncertainty; Safety measure (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:257:y:2023:i:c:s0925527322003413

DOI: 10.1016/j.ijpe.2022.108759

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