Stochastic risk-constraint pricing strategy of electricity retailers based on Dempster-Shafer evidence theory

This paper investigates a bi-level stochastic energy acquisition strategy for electricity retailers with self-generation facilities to supply clients' demand from various resources of energy. The main propose of the presented work is modeling clients' switching behavior based on uncertainties of rival retailers' strategy and wholesale prices. The upper sub-problem models wholesale price fluctuations and determines retailer's participation levels in the forward and wholesale markets as well as scheduling of self-generation facilities based on the minimum supply cost. In the lower sub-problem, the Dempster-Shafer evidence theory (DSET) is applied to determine the retail selling price based on rivals' strategies and clients' switching tendency. DSET defines two belief and plausibility functions to evaluate the possibility of accepting selling prices by clients. According to the retailer's defined belief level and the minimum expected cost, the selling price is calculated in the lower sub-problems. Finally, a case study is used to show the performance of proposed method. (C) 2017 Elsevier Ltd. All rights reserved.