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Risk-Based Energy Procurement via IGDT

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Robust Energy Procurement of Large Electricity Consumers

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Abstract

In this chapter, the power procurement problem of a large consumer under power price uncertainty is solved using information gap decision theory (IGDT). In contrast to other uncertainty modeling methods, the IGDT method makes it possible to model the positive and negative impacts of uncertainty through different strategies. To do so, the risk of the power procurement process of a large consumer is assessed considering the opportunity and robustness functions of the IGDT method, and three different strategies, risk-averse, risk-neutral, and risk-taker, are derived. It should be noted that the problem is formulated as mixed integer nonlinear programming and solved using GAMS programming software.

Based on the obtained results, in the risk-averse strategy, the large consumer is 12.16% robust against the power price uncertainty without implementing demand response program (DRP) by paying $42,000 to meet electricity demand. In addition, considering $40,000 as the procurement cost, 11.4% robustness is obtained against the power price increase in the pool market due to implement TOU-DRP. Also, in the risk-taker strategy, for a 15% power price reduction in the market, the large consumer’s costs will be $37,250 and $35,700 in cases without and with DRP, respectively, which means DRP will reduce procurement costs by about 4.2%.

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Author information

Authors and Affiliations

  1. 3 Med Group, Tehran, Iran

    Moeid Dehghanpour Farashah

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  1. Moeid Dehghanpour Farashah
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Editors and Affiliations

  1. Department of Electrical Engineering, University of Bonab, Bonab, Iran

    Sayyad Nojavan

  2. Sharif University of Technology, Knowledge Management Office, Tehran, Iran

    Mahdi Shafieezadeh

  3. Young Researchers and Elite Club, Ardabil Branch, Islamic Azad University, Ardabil, Iran

    Noradin Ghadimi

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Farashah, M.D. (2019). Risk-Based Energy Procurement via IGDT. In: Nojavan, S., Shafieezadeh, M., Ghadimi, N. (eds) Robust Energy Procurement of Large Electricity Consumers . Springer, Cham. https://doi.org/10.1007/978-3-030-03229-6_5

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  • DOI: https://doi.org/10.1007/978-3-030-03229-6_5

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-03228-9

  • Online ISBN: 978-3-030-03229-6

  • eBook Packages: EnergyEnergy (R0)

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