Dynamic Sale Price Setting for Load Serving Entity's Profit Maximization

This paper presents an optimization model to determine optimal dynamic sale prices and optimal energy procurement decisions of a load-serving entity (LSE) in the presence of solar energy for consumer's elastic demand. LSE determines these decisions to maximize its profit at a given level of ris...

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Bibliographic Details
Main Authors: Chawda, Sandeep, Mathuria, Parul, Bhakar, Rohit, Sreekumar, Sreenu
Format: Conference Proceeding
Language:English
Subjects:
Analytical models
Dynamic sale prices
Elastic demand
Load modeling
Load serving entity
Optimization
Procurement
Renewable energy
Risk
Solar energy
Uncertainty
Wind energy
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Summary:This paper presents an optimization model to determine optimal dynamic sale prices and optimal energy procurement decisions of a load-serving entity (LSE) in the presence of solar energy for consumer's elastic demand. LSE determines these decisions to maximize its profit at a given level of risk. Consumer's elastic demand is considered by its price elasticity, and price uncertainty is modeled using the mean-variance approach. Optimal decisions of risk-neutral and risk-averse LSE are illustrated through a case study. Results indicate that LSE builds consumer demand by lowering sale prices during solar energy availability hours to utilize it optimally.
ISSN:1944-9933
DOI:10.1109/PESGM41954.2020.9281805