Medium-Term Electricity Trading Strategies for Producers, Consumers and Retailers

Within a yearly time framework this tutorial paper describes stochastic programming models to determine the electricity market strategies pertaining to producers, consumers and retailers. A year-ahead forward market and a day-ahead pool market are considered. Hourly pool prices as well as the hourly demands of consumers and retailers are modeled as stochastic variables. Decisions pertaining to the forward market are made at the beginning of the year while decisions involving the pool are made throughout the year. The resulting large-scale decision-making problems of producers, consumers and retailers are formulated and characterized as large-scale mixed-integer linear programming problems, which can be solved using commercially available software. Conclusions are finally drawn.