A System Dynamics Conceptual Model on Retail Electricity Supply and Demand System to Minimize Retailer's Cost in Eastern Australia

In eastern Australia's electricity market, the retailers have to purchase a certain amount of power to fulfill their customers’ demand. When the purchased power through forward contracts exceeds the electricity demanded by customers it leads to retailer's loss. On the other hand, the demand is higher than the purchased power which urges the company to buy extra power from a peaking power generator at electricity market with volatile price. This research studies power supply and demand systems at electricity retail market. System Dynamics (SD) methodology is used to investigate the influence of weather and forward contract conditions on the fluctuation of energy supply and demand in order to minimize energy retailer's cost. A respective conceptual model has been built by using qualitative phase in SD approach which enables further development in the SD's quantitative phase.