Robust Energy Procurement Under Time-of-Use Pricing
The time-of-use (TOU) pricing is one of the most important demand response programs in an electricity market, which is used to manage the peak load demand. In this way, capital investment of extra power plants, which may be required few hours during a year, is eliminated. In the TOU demand response program, a constant set of tariffs for different hours of the day and/or seasons is defined at the beginning of a given horizon.
In this chapter, the TOU demand response program is considered to implement the power procurement problem of a large consumer in the presence of pool price uncertainty. The uncertainty of power price in the pool market is modeled using the robust optimization method in which the sensitivity of the optimal solution to the power price uncertainty is reduced. The application of the TOU is reported and analyzed through numerical studies. In addition, obtained results are compared with the deterministic case and without implementing TOU demand response programs.
KeywordsTime-of-use pricing Demand response program Robust energy procurement Power price uncertainty Robust optimization approach
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