Abstract
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.
Highlights
The gradual liberalization and development of a single and competitive energy market has been one of the main pillars of the European Union (EU) energy policy, in the context of the wider changes in the energy sector in past few years [1]
The creation of a liberalized electricity market was considered a key priority by the EU institutions, as it was considered that is an important step towards the completion of the internal energy market, more efficient production, transmission and distribution of electricity, enhancing the security of electricity supply and strengthening the competitiveness of the European economy in conjunction with the protection of the environment [2]
The proposed methodological framework for the wholesale market clearing problem has been assessed on an illustrative case study, the key characteristics of which are provided in Tables 1 and 2
Summary
The gradual liberalization and development of a single and competitive energy market has been one of the main pillars of the European Union (EU) energy policy, in the context of the wider changes in the energy sector in past few years [1]. The transition from the monopolizing energy industry in the liberalized energy market is done without the activities of the industry to change numerically, but establishing the possibility of changes in the number of energy actors in the generation and distribution sectors. The result of these changes was an increase of competitive activities, and the transformation of the state into a regulatory supervisor, who sets the criteria and grants the license to deal with these activities for everyone [6,7]
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