Credibility Theory-Based Information Gap Decision Theory to Improve Robustness of Electricity Trading under Uncertainties

Xin Zhao, Peng Wang, Qiushuang Li, Yan Li, Zhifan Liu, Liang Feng () and Jiajia Chen
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Xin Zhao: Economic & Technology Research Institute, State Grid Shandong Electric Power Company, Jinan 250021, China
Peng Wang: Economic & Technology Research Institute, State Grid Shandong Electric Power Company, Jinan 250021, China
Qiushuang Li: Economic & Technology Research Institute, State Grid Shandong Electric Power Company, Jinan 250021, China
Yan Li: Economic & Technology Research Institute, State Grid Shandong Electric Power Company, Jinan 250021, China
Zhifan Liu: Economic & Technology Research Institute, State Grid Shandong Electric Power Company, Jinan 250021, China
Liang Feng: School of Electrical and Electronic Engineering, Shandong University of Technology, Zibo 255000, China
Jiajia Chen: School of Electrical and Electronic Engineering, Shandong University of Technology, Zibo 255000, China

Energies, 2023, vol. 16, issue 22, 1-18

Abstract: In the backdrop of the ongoing reforms within the electricity market and the escalating integration of renewable energy sources, power service providers encounter substantial trading risks stemming from the inherent uncertainties surrounding market prices and load demands. This paper endeavors to address these challenges by proposing a credibility theory-based information gap decision theory (CTbIGDT) to improve robustness of electricity trading under uncertainties. To begin, we establish credibility theory as a foundational risk assessment methodology for uncertain price and load, incorporating both necessity and randomness measures. Subsequently, we advance the concept by developing the CTbIGDT optimization model, grounded in the consideration of expected costs, with the primary aim of fortifying the robustness of electricity trading practices. The ensuing model is then transformed into an equivalent form and solved using established standard optimization techniques. To validate the efficacy and robustness of our proposed methodology, a case study is conducted utilizing a modified IEEE 33-node distribution network system. The results of this study serve to underscore the viability and potency of the CTbIGDT model in enhancing the effectiveness of electricity trading strategies in an uncertain environment.

Keywords: electricity service providers; credibility; information gap decision theory; robustness; uncertainties management (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: 2023
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