Electricity purchase strategy and cost allocation for electricity retailers

With the advancement of power system reform, the power sales side liberalization has become the focus of attention. Electricity retailers have become new players in the open power market. This paper proposes a strategy to determine the optimal forward-contract purchase for electricity retailers. The proposed model optimizes purchase costs of bilateral contracts and transmission costs taking into account the penalties for out-of-bounds. Furthermore, the power flow tracking method is applied to obtain the power transmission path of each retail consumer, which used as a basis for the reasonable allocation of power purchase costs and transmission costs. Finally, the proposed method is tested on the IEEE 14-bus system, and the feasibility of the method is verified.