A model for setting and validating sale prices of an electricity trader by means of load shifts
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 12 September 2008
Abstract
Purpose
The purpose of this paper is to tackle the problem an electricity trader faces when trying to set and validate his sale prices.
Design/methodology/approach
The solution approach consists in offering adequate incentives to the customers in order to encourage them to shift their consumptions to more favorable time periods; this is achieved by suitable price modifications. The problem of determining the most sensible prices to offer yields to a quadratic programing model which can be efficiently solved to optimality.
Findings
This paper analyses an opportunity that traders can exploit for increasing their profit margins and, in general, for setting and validating their electricity sale prices. The real case of an Italian trader has been analysed and the numerical results show that the obtained sale price modifications may produce savings, both for the trader and for his customers.
Originality/value
This research provides insights about the problem an electricity trader faces when setting his sale prices; it mainly focuses on the Italian market although the developed mathematical model is sufficiently general to be adopted in different scenarios.
Keywords
Citation
Coslovich, L., Pesenti, R., Piccoli, G. and Ukovich, W. (2008), "A model for setting and validating sale prices of an electricity trader by means of load shifts", International Journal of Energy Sector Management, Vol. 2 No. 3, pp. 351-367. https://doi.org/10.1108/17506220810892928
Publisher
:Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited