A Novel Integrated Profit Maximization Model for Retailers under Varied Penetration Levels of Photovoltaic Systems

Ioannis P. Panapakidis, Nikolaos Koltsaklis and Georgios C. Christoforidis
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Ioannis P. Panapakidis: Department of Electrical and Computer Engineering, University of Thessaly, 38221 Volos, Greece
Nikolaos Koltsaklis: Department of Electrical and Computer Engineering, University of Western Macedonia, 50100 Kozani, Greece
Georgios C. Christoforidis: Department of Electrical and Computer Engineering, University of Western Macedonia, 50100 Kozani, Greece

Energies, 2020, vol. 14, issue 1, 1-27

Abstract: In contemporary energy markets, the Retailer acts as the intermediate between the generation and demand sectors. The scope of the Retailer is to maximize its profits by selecting the appropriate procurement mechanism and selling price to the consumers. The wholesale market operation influences the profits since the mix of generation plants determines the system marginal price (SMP). In the related literature, the SMP is treated as a stochastic variable, and the wholesale market conditions are not taken into account. The present paper presents a novel methodology that aims at connecting the wholesale and retail market operations from a Retailer’s perspective. A wholesale market clearing problem is formulated and solved. The scope is to examine how different photovoltaics (PV) penetration levels in the generation side influences the profits of the Retailer and the selling prices to the consumers. The resulting SMPs are used as inputs in a retailer profit maximization problem. This approach allows the Retailer to minimize economic risks and maximize profits. The results indicate that different PV implementation levels on the generation side highly influences the profits and the selling prices.

Keywords: deregulated electricity market; demand response; optimization; photovoltaics; retailer (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
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