Optimal Price and Quantity Determination of Retailer Electric Contract and maximizing social welfare in Retail Electrical Power Markets with DG

TL;DR

This paper presents a two-level optimization model for retailers in electrical power markets to maximize profits and minimize distribution costs with distributed generation, validated through IEEE test network simulations.

Contribution

It introduces a novel two-level optimization approach for contract setup and cost minimization considering distributed generation in retail power markets.

Findings

The proposed model effectively reduces distribution costs.

Retailer profits are maximized under the new contract setup.

Simulation results demonstrate the model's practical applicability.

Abstract

Retail electrical power marketers, also known as retailers, typically set up contracts with suppliers to secure electricity at fixed prices on the one hand and with end users to meet their load requirements at agreed rates on the other hand. Also high penetration of distributed generation (DG) resource is increasingly observed worldwide. Considering the viewpoint of a retailer, this paper analyzes the problem of setting up contracts on both the supplier and end-user sides to maximize profits while maintaining a minimum operational cost of distribution system. The proposed two-level optimization models can minimize the cost of distribution system with Distributed Generation and maximize the profits of retailers. The numerical simulations are carried out based on an IEEE 33-bus test distribution network. Test results are included to show the performance of the proposed method.