Retail Energy Market Research Articles

Predictive Analytics for Enterprise Innovation of Retail Energy Market Modeling of Integrated Demand Response and Energy Hubs

Many combined heat and power (CHP) energy hubs work within the following heat load mode in the wintertime to supply the request for heat, and renewable energy has been often restricted in the unified energy network (UEN) markets. The power Internet of Things (PIoTs) has enabled UEN to transmit data increasingly frequently. As a result of flexible connections among various UEN networks, renewable energy increases its accommodation capacity considerably. Thus, the purpose of the study is to optimize UEN within the backdrop of PIoTs. According to the impact of PIoTs on UEN, this paper develops the combined demand response (DR) process and the layout of the important parts of UEN. Afterward, this study develops a bi-level economic dispatching process based on the cyber-physical systems of PIoTs and UEN. In the dispatching process, the higher level optimizes the total UEN function; the lower level optimizes the demand-side equipment output and combined DR. Then, the gray wolf optimization scheme is used to solve the bi-level dispatch. Lastly, the standard UEN and the practical network have been used to verify the efficiency of the suggested process.

Fuzzy Decision-Based Energy Management of Energy Grids with Hubs considering Participation of Hubs and Networks in the Energy Markets

With the creation of competitive environments, such as electricity market, it is expected that energy networks and active consumers such as energy hubs participate in the market to promote their economic situation. So, the article proposes the optimal involvement of energy networks and hubs in energy markets in two wholesale and retail designs based on the energy management system at the same time. The proposed scheme is expressed as two-objective optimization. The first objective is to minimize the cost of different types of energy in electricity-gas-thermal networks. In another objective function, the cost of energy (which is the difference between the energy purchase cost and energy sale income) of energy hubs in the retail market is minimized. The scheme is bound to optimal power flow equations of the mentioned networks and operating model of power sources and active loads. Then, the Pareto optimization mixed with the sum of weighted functions helps extract an optimal compromise solution on the basis of fuzzy decision-making. Finally, the scheme is applied to a test system, and the obtained numerical results confirm that energy hubs are improved financially, and economic and operation conditions of the electricity-gas-thermal networks are enhanced simultaneously. So, significant profit can be achieved for EHs in the retail energy market. The economic situation of the networks enhances up to roughly 10% compared with that of power flow studies. Also, operating situation of the networks enhances by about 12% to 53% compared with a case without EHs.

Wholesale and retail energy markets model for the energy networks in the presence of the energy hubs

In this paper, the formulation of the energy market in two wholesale and retail models for different energy networks such as electric, gas and thermal networks in the presence of energy hubs according to the two-layer energy management system is presented. In the first layer of EMS, the coordination of resources and ALs with the operator of EHs is considered, and in the second layer of EMS, the coordination of the operator of EHs with ENOs is considered. In the proposed design, the mentioned networks have participated in the wholesale market as private distribution companies or DisCo and then buy energy from it. These companies have shared the purchased energy in the retail energy market environment between consumers and EHs connected to itself. This design is expressed in the form of two-level optimization, the upper level of which is the minimization of the expected energy cost of ENs in the mentioned markets, and the other level is the minimization of the expected energy losses of ENs in the retail market. In the following, the Karush–Kuhn–Tucker (KKT) method and Pareto optimization technique based on epsilon constraint method were used to derive the single-level and single-objective problem. Then, the unscented transformation (UT) method was used to model the uncertainties of load, energy price, renewable power and EV energy demand. Finally, based on the numerical results, it was observed that the proposed plan achieves the highest profit for EHs in proportion to the time-varying energy price. Also, with the optimal energy management of EHs, it has been able to reduce the energy cost of ENs by about 12% compared to load flow studies.

A Framework for the Analysis of the Sustainability of the Energy Retail Market

This paper addresses the issue of assessing the sustainability of policy decisions of the Energy Retail Market, explicitly considering the retail energy market, unlike existing approaches in the literature that analyze the energy market as a whole. The sustainability assessment is treated as the process by which the sustainability implications of an initiative are assessed, where the initiative can be a proposed or existing policy, plan, program, project, piece of legislation, or current practice or activity. The paper provides a comprehensive overview of the state of the literature on the sustainability of policy decisions in the retail energy sector and formulates a conceptual framework for policy sustainability analysis in the retail energy sector. The systematic review is complemented by a quantitative bibliometric analysis on the 48 collected papers published from 1997 to 2022. The proposed framework allows for a balanced analysis of the sustainability of policy decisions by evaluating the technical, economic, and environmental impacts. It could be used to develop a list of indicators that can map the different impacts and their interactions. Critical analysis of the existing findings leads us to identify future research directions.

When indicators fail electricity policies: Pitfalls of the EU's retail energy market Barrier Index

An important goal of EU energy policy is to ensure energy justice during the green transition. The Commission considers the functioning and competitiveness of the retail energy market for households to be proxies for justice and consumer welfare. The European Barriers in Retail Energy Market Project (the EB Project) is instrumental in assessing and ensuring this competitiveness. The EB Project centres on the creation of the Barrier Index (BI), which identifies barriers to entry in the national markets for electricity and gas suppliers across the EU and ranks Member States on the basis of eight indicators. This article critically assesses the reliability of the BI. A faulty BI could lead Member States down the wrong path or towards bad decisions with respect to the regulation of the retail energy market in light of the EU's policy goals. This research identifies problems with the methodology and data collection regarding the construction of the BI indicators in the electricity market specifically. The latter is exemplified through case studies of the Dutch and Portuguese national reports. The identified issues call into question the reliability of the BI as a whole. Possible measures to improve the quality of indicators are discussed in the conclusions.

Analysis of Electricity Consumption in Poland Using Prediction Models and Neural Networks

The challenges of the modern world require transformations in the energy market towards the possible reduction of consumption and greater use of renewable sources. The conducted research of consumers of this market confirms that the behaviour in the field of increased use of renewable energy is burdened with cognitive errors and motivational factors, which makes it difficult to conduct quantitative research. Electricity demand forecasting can be modelled using selected quantitative methods. In this way, not so much the behaviour, but the result of the consumer’s behaviour is predicted. The research presented in the article has been divided into two parts. The aim of the first one is to study the prospects of a greater share of renewable sources in obtaining energy in Poland, based on the attitudes and opinions of consumers on the retail energy market, legal regulations and the energy balance. The aim of the second part is to build forecasts of daily, weekly, monthly and quarterly electricity consumption in Poland, including the prediction of the RES share, using selected machine and deep learning methods. The analyses used the time series of daily electricity consumption in Poland from 2015–2021; the ENTSO-E data was obtained from the cire.pl website. Depending on the adopted forecast horizon, the forecasting method with the lowest MAPE error was exponential smoothing, SARIMA and NNETAR. An evolution of energy consumers’ attitudes towards pro-ecological and pro-social sensitivity and understanding of the importance of RES for the economy was also observed.

The challenge of removing a mistaken price cap

The UK Competition and Markets Authority in 2016 calculated a detriment of £1.4 billion–2 billion in Great Britain's retail energy market, attributed to weak customer response. The government in 2019 imposed a tariff cap until competition is effective. I argue that the cap was a mistake: there was no such detriment and there are valid reasons for customers not changing supplier. The market was not previously uncompetitive and inefficient as suggested. The cap has rendered the sector loss-making and led to supplier exit. The assessments of effective competition by the Office of Gas and Electricity Markets have been arbitrary and implausible. Some alternative ways ahead are noted, but latest government policy invokes behavioural economics to propose even greater intervention. A postscript discusses dramatic recent developments.

Integrated Demand Response programs and energy hubs retail energy market modelling

The present research aims to formulate competition in a retail energy market in the presence of an Integrated Demand Response (IDR) program to reduce prosumer costs and increase retailer profits. This gives prosumers more degrees of freedom to reduce their energy costs. The retail energy market includes retailers and prosumers equipped with an energy hub containing a boiler for producing heat and combined heat and power (CHP). Retailers aim to maximize profit, whereas prosumers seek to minimize their costs. Hence, a multi-leader-follower game with a bi-level program emerges in which the upper level deals with the profit maximization of each retailer while the lower level considers the cost minimization of each prosumer. The strategic behaviour of each retailer is modelled as a Mathematical Program with Equilibrium Constraints (MPEC) problem. Simultaneously solving all MPECs, which leads to an Equilibrium Problem with Equilibrium Constraints (EPEC), determines the market equilibrium point. The equilibrium point is achieved using mathematical, analytical methods and linearization of nonlinear constraints by accurate techniques. Two different case studies are developed to investigate how the number of retailers influences the market equilibrium point. The first case includes two retailers, while the second case considers an increase in the number of retailers. The results demonstrate that with an increase in retailers' number, their competition increases, causing the prosumers costs to reduce. Furthermore, our results suggest the IDR impact on reduced prosumers cost and increased retailers profit.

Crude oil prices pass-through to retail petroleum product prices in Nigeria: evidence from hidden cointegration approach

This study produces the first-ever analysis in Nigeria on the asymmetric response of petroleum product prices to international crude oil prices by employing the hidden cointegration approach on quarterly data spanning from 1973Q1 to 2020Q2. After the preliminary tests of data description, unit root analysis and cointegration test, we find that positive and negative components of both the crude oil and petroleum prices move together in the long run. The result suggests evidence of long-run asymmetry in Nigeria. The empirical findings from both the long-run and short-run results show that petroleum prices in Nigeria respond asymmetrically to changes in crude oil prices. Specifically, the outcomes from the study reveal that positive changes (increase) in crude oil prices produce a larger and stronger effect on petroleum prices than the effect of negative changes (decrease) in crude oil prices indicating evidence of an asymmetric relationship between the two prices in Nigeria. Thus, the findings confirm the existence of the rocket and feather hypothesis in the retail energy market in Nigeria. Overall, the study finds convincing evidence to support the hypothesis of “rocket and feather” in the pass-through effect of crude oil prices on petroleum prices in Nigeria. The study advocates for more government intervention in the energy market to reduce the welfare loss associated with an increase in crude oil prices on the citizens.

From rational to relational: How energy poor households engage with the British retail energy market

In the sociological tradition, markets are understood to be constituted of social relations: relations of trust, friendship, power and dependence, which have moral and emotional qualities. In this paper, we explore how people in energy poor households construct the energy market and its impact on energy policy. Drawing on secondary analysis of a large collection of qualitative interviews on the lived experience of energy poverty carried out from 2003 to 2018 (n = 197 interviews and 20 selected), and the results of an OFGEM quantitative survey on consumer engagement released in 2018, we document the experience of the energy poor as actors in the British retail energy market. We uncover a number of challenges and opportunities facing energy poor participants in the market: having access to good quality information about suppliers, energy tariffs and grants, and having the skills and resources to act on this is important, without these it can be difficult for people to take action. In explaining people’s engagement with the market, we draw on the concept of ‘socio-economic attachments’, showing how a supportive network of family and friends, and people’s trust of and resulting loyalty to their energy supplier mediate their engagement. These findings lead us to relational explanations of the retail energy market, with related policy recommendations: if we are to aim for people to act ‘rationally’, they will need support to navigate the market from intermediaries.

The CMA\u2019s assessment of customer detriment in the UK retail energy market

In 2016, the UK Competition and Markets Authority (CMA) found that “weak customer response” enabled incumbent UK energy retailers to set higher and discriminatory prices to residential customers. The CMA estimated the associated higher prices constituted a customer detriment in the range £1.4 bn to £2 bn per year. Although the CMA recommended against a price cap on most domestic energy tariffs, the size of the detriment and public concern about “rip-off energy tariffs” nonetheless led the Government to impose a price cap as from January 2019. This paper examines the CMA’s calculation of customer detriment and suggests that it is inconsistent with CMA Guidelines and unprecedented with respect to its nature, magnitude and policy impact. Alternative more realistic calculations suggest that any detriment would have been nearly an order of magnitude lower, so that a price cap was inappropriate. This raises a number of questions about the CMA’s approach.

Deep Q-Network Based Energy Scheduling in Retail Energy Market

As a significant component of electric energy trades, retail electric market (REM) can effectively alleviate the pressure of load demand from the power grid. However, the load demand uncertainty of customers becomes a nodus because retail electricity providers (REPs) should predict the load demand when trading with wholesaler electricity provider (WEP) based on the interaction. Therefore, in this paper, we propose an optimal energy scheduling scheme in REM with consideration of the influence of decisions made in pre-purchase stages to situations in real-time stages. Firstly, we present a trading framework to analyze the strategies of REPs in REM, in which REPs conduct both pre-purchase trading with WEP, and real-time trading with customers. Then, to solve the scheduling problem caused by the demand uncertainty of customers, we design a power allocation mechanism based on the charging demand degree, by which REPs can minimize the operating cost while ensuring that each electric vehicle can be charged with sufficient energy. Next, to minimize the cost of REPs in the pre-purchase stage, we adopt deep Q-network (DQN) algorithm to implement the pre-purchase schedule. The charging station adjusts the pre-purchased schedule for each period through Q-learning and utilizes the optimal strategy to design the electricity schedule. Finally, simulation experiments show that the proposal can obtain the optimal strategy to significantly reduce the operating costs of REP.

Integrated demand response in district electricity-heating network considering double auction retail energy market based on demand-side energy stations

Integrated demand response (IDR) is an important approach to promote renewable energy consumption and improve energy efficiency in integrated energy systems. In IDR, not only multi-energy users, but also demand-side energy stations, can become demand response resources. Hence, making full use of the flexibility of energy supply and the elasticity of electricity and heat demand is vital to the development of IDR. In this paper, based on the background of the electricity-heat integrated energy system, the precise models of typical controllable electric and heat load are constructed considering the user’s requirements for comfort. Based on the model, the electricity-heat coordinated retail market framework is proposed to achieve the coordinated clearing of electric and heat load, managing the district energy generation and consumption through transactive control methods. The bidding strategies for electric and heat load are established for customers to participate in the market. The market clearing rules are defined with the aim of maximizing the net revenue of integrated energy service agency to realize the optimal energy allocation of energy station devices. Finally, the case study demonstrates that the proposed method can optimize both the resource allocation of demand-side energy stations and the energy use of customers through economic means. About 80–90% of wind power can be absorbed through participation in market bidding, and the specific consumption rate depends on the type of energy stations and users’ demand. By guiding customers to consume energy reasonably during different market clearing periods, the energy expenditure can be reduced by 18.76% on average under the premise that the users’ comfort is guaranteed.

Promoting competition and protecting customers? Regulation of the GB retail energy market 2008\u20132016

In 1999 the GB retail energy market was open to competition for residential customers. In 2008 Ofgem began a series of regulatory interventions, notably a nondiscrimination condition and subsequently a restriction to four “simple tariffs”. This reversed its previous policy of minimal intervention. This paper explores the reasons for this change of policy, drawing upon the responses of economists and others to Ofgem and Competition and Market Authority (CMA) consultations. It argues that key factors were a significant increase in energy prices before 2008, the reduced involvement of economists in senior roles at Ofgem, and systematic changes in Government policy and the statutory regulatory framework. Finally, the paper examines what the CMA Energy Market Investigation had to say about this in 2016. The CMA found that these were inappropriate regulatory interventions, and laid part of the blame on arrangements for governance of the regulatory framework.

The UK Domestic Gas Electricity (Tariff Cap) Act: Re‐regulating the Retail Energy Market

AbstractThe UK retail energy market has witnessed multiple regulatory interventions since its liberalisation almost two decades ago. Such interventions reached their peak with the enactment of the UK Domestic Gas Electricity (Tariff Cap) Act in July 2018. The Act puts in place a requirement on the independent regulator, the Office of Gas and Electricity Markets (Ofgem), to set an absolute price cap on poor value tariffs. As such, it signals a repudiation of the overarching paradigm of consumer empowerment that has informed regulatory remedies to date. Rather than advocating for a different paradigm, this article highlights the difficulties inherent in reconciling price caps – both practically and conceptually – with the competitive process and consumer empowerment. It also discussses other instruments, not necessarily exhausted in retail price regulation, that can render affordable energy prices, without sacrificing consumer empowerment.

Multiple Energies Retailing Based on Stackelberg Game Model

Gas-based distributed energy stations are supported by Chinese government and have significant commercial potential. Recently, Chines retail electricity market is reforming. Integrating distributed energy stations makes retailers transform into multi-energy providers (MEPs) and brings huge competitive advantages. A multi-leaders and multi-followers Stackelberg game between MEPs and energy consumers (ECs) is applied to simulate the dynamic behaviors of pricing, producing and consuming. MEPs as the leaders optimize the electricity and heat prices with the aim of maximizing their own income. ECs as the followers optimize the electricity and heat demands with the aim of maximizing their own consumer surplus based on the prices from different MEPs. In addition, the price set by a MEP also depends on the prices of other MEPs. Therefore, there is a non-cooperative game among MEPs. A distributed algorithm is executed by a virtual energy exchange center (VEEC) to solve the game equilibrium and analyze the joint pricing of multiple energy in the retail energy market. By analyzing the numerical results, we verify the validity of the Stackelberg game model, as well as the accuracy of the proposed algorithm and mathematical derivation.

Optimal Planning and Operational Management of Open-Market Community Microgrids

In this article, a new business model comprising multiple stakeholders is proposed to develop a frame for future flexible retail energy market in community microgrids. The microgrid comprises multiple and different distributed energy resources (DERs) such as renewable generation units, battery energy storage systems (BESSs), and micro diesel engines (MDE), to minimize daily operational costs of the system. To solve the defined complex optimization model, some operational strategies are proposed and then genetic algorithm is adopted to determine the hourly optimal power dispatch. The case study shows that the proposed model minimizes the daily operating cost of the community system effectively.

A Typology of UK Energy Service Brands Based on Size, Licencing and Source of Energy

The UK’s retail energy market is very dynamic. The number of suppliers is changing with some companies leaving the market and some entering. Having a full picture of the players within the sector may be considered daunting. While acknowledging the limitations in getting a definite list of company, this paper presents a typology of UK Energy Service Brands based on their sizes, licencing arrangement and their source of energy. It is anticipated that this will makes two key contributions to the literature. First, it extends the understanding of energy brands in the United Kingdom and secondly, aid future research and theoretical framework development in the UK energy sector.

Micro and Small Businesses’ Satisfaction With the UK Energy Market: Policy Implications

While householders’ ability to navigate the domestic retail energy market has generated considerable debate, little attention has been given to micro and small businesses’ (MSBs) purchasing of energy. This paper provides the first academic assessment of MSBs’ satisfaction with the UK’s retail energy market. Using survey data from the UK energy regulator we find that while intermediaries are central to MSBs switching energy supplier, the quantity of marketing contact received from them is a key source of dissatisfaction. This dissatisfaction with marketing contact has direct policy relevance as the Competition and Market Authority’s 2016 Energy Market Investigation recommended that a database of ‘disengaged’ MSBs be established to enable marketing communications from rival suppliers to prompt MSBs to switch. We also query whether the need for more MSB engagement is obvious, given the prevalence of multi-year energy contracts among MSBs, suggesting that the ‘optimal’ switching level of MSBs likely differs from that of householders. Our evidence suggests that there could be benefits from increased regulatory oversight of intermediaries’ behaviour. Furthermore we note that existing data fail to address an issue of importance for regulatory decision making: the overlap between households and MSBs and the potential choice for MSBs between domestic and non-domestic contracts. Overall, the paper exemplifies the types of insights that can be obtained by regulators providing wider access to the surveys they commission. We recommend that UK regulatory agencies share anonymised raw survey data by default to enhance the transparency, and potentially quality, of their decision making.

Energy Affordability in the UK: Corrected Energy Expenditure Shares 1992-2014

The retail energy market in the UK is highly politicised and since the turn of the millennium successive governments have pursued significant policies designed to ease the affordability of energy for certain groups. One of these policies, namely Winter Fuel Payments, represents both a significant increase in resources targeted at affordability support and a shift in emphasis from those on low incomes towards the elderly. This paper tracks the proportion of household expenditure devoted to energy between 1992 and 2014, implementing a major new correction to energy expenditure for households with prepayment meters, who tend to be low income households. First, the time series is used to argue that the political salience of distributional concerns in the retail energy market should not come as a surprise. Second, we find that while households with a head aged over 80 have elevated energy expenditure shares (similar to households at the bottom of the income distribution), pensioners aged 65-70 have energy expenditure shares comparable to households at the middle of the income distribution. Third, mapping major policy developments against the time series shows the most generous and ambitious affordability support schemes were introduced when energy was nearing its most affordable over a 35-year period, suggesting political considerations influenced both the recipients of support and the timing of interventions.