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

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 p...

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Bibliographic Details
Published in:Energies (Basel) 2021-01, Vol.14 (1), p.92
Main Authors: Panapakidis, Ioannis P., Koltsaklis, Nikolaos, Christoforidis, Georgios C.
Format: Article
Language:English
Subjects:
Competition
Consumers
demand response
deregulated electricity market
Economic conditions
Electricity
Energy industry
Influence
Liberalization
Market prices
Maximization
optimization
Photovoltaics
Profit maximization
Profits
Retail stores
retailer
Stochasticity
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Summary: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.
ISSN:1996-1073
1996-1073
DOI:10.3390/en14010092