Robust optimal offering strategy of large consumer using IGDT considering demand response programs

• Two procurement objective functions for a large consumer considering DRP are proposed.
• The new load modeling and formulation for DRP has been proposed.
• The procurement strategies of large consumer, a technique based on IGDT is proposed.
• The proposed method does not minimize the procurement cost but allows deriving robust decision with respect to price volatility.
• The proposed method either deals with optimizing the opportunities to take advantage from low pool prices.

In restructured electricity market, the consumers have various procurement strategies to supply their electricity demand from alternative resources. An approach to cost reduction and risk management for a large consumer is participation in demand response programs (DRP). Due to uncertain nature of pool prices and price fluctuations in pool market, uncertainty modeling is inevitable. For evaluation of different procurement strategies of large consumer, a technique based on information gap decision theory (IGDT) is proposed. This paper develops an energy acquisition model for large consumer with multiple procurement options including distributed generation (DG), bilateral contracts and pool market purchase with participating in DRP. This paper is focused to study the effect of DRP on the procurement strategy problem. Also, the time-of-use (TOU) rates of demand response programs have been modeled and consequently its influence on load profile and procurement strategy has been discussed. The proposed method does not minimize the procurement cost, but allows deriving robust decision with respect to price volatility. The robustness of procurement strategies for high procurement costs is optimized and related procurement strategy is proposed. The proposed method either deals with optimizing the opportunities to take advantage from low procurement costs or low pool prices. Finally, a case study is studied to show the advantages of proposed method.