A bilevel approach to optimize electricity prices

• Main Authors: Alekseeva Ekaterina, Brotcorne Luce, Lepaul Sébastien, Montmeat Alain
• Format: Article
• Language: English
• Published: University of Belgrade 2019-01-01
• Series: Yugoslav Journal of Operations Research
• Subjects: demand-side management; electricity market; bilevel optimization; complementary slackness conditions
• Online Access: http://www.doiserbia.nb.rs/img/doi/0354-0243/2019/0354-02431800002A.pdf

To meet unbalanced demand, an energy provider has to include costly generation technologies, which in turn results in high residential electricity prices. Our work is devoted to the application of a bilevel optimisation, a challenging class of optimisation problems, in electricity market. We propose an original demand-side management model, adapt a solution approach based on complementary slackness conditions, and provide the computational results on illustrative and real data. The goal is to optimise hourly electricity prices, taking into account consumers' behaviour and minimizing energy generation costs. By choosing new pricing policy and shifting electricity consumption from peak to off-peaks hours, the consumers might decrease their electricity payments and eventually, decrease the energy generation costs.