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A model for setting and validating sale prices of an electricity trader by means of load shifts

Luca Coslovich (Dipartimento di Elettrotecnica, Elettronica ed Informatica, Università degli Studi di Trieste, Trieste, Italy)
Raffaele Pesenti (Dipartimento di Matematica Applicata, Università Ca' Foscari di Venezia, Venezia, Italy)
Giovanni Piccoli (Dipartimento di Elettrotecnica, Elettronica ed Informatica, Università degli Studi di Trieste, Trieste, Italy)
Walter Ukovich (Dipartimento di Elettrotecnica, Elettronica ed Informatica, Università degli Studi di Trieste, Trieste, Italy)

International Journal of Energy Sector Management

ISSN: 1750-6220

Article publication date: 12 September 2008

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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

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited