Risk-based optimal decision-making by the retailer in a mixed local and wholesale market environment considering demand response solution

The present research proposes a comprehensive model to determine the retailer strategy for purchasing electrical power from the wholesale and/or local market in an active distribution network. The uncertainties associated with the load and distributed generation resources in the active distribution network, wholesale market price, and behavior of the local market players were all incorporated into the presented model. The demand response program benefits the retailers in governing the risks. A risk-based decision-making scheme was established in this paper that considered every instrument accessible to retailers and the uncertainties involved. The major objective of this paper is to maximize the retailer benefit concerning a tolerable risk. In order to model risks, scenario theories were exploited and Particle Swarm Optimization (PSO) was employed to solve the optimization problem. The proposed scheme was simulated in an actual network, and the obtained results confirmed the effectiveness and computability of this method.