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A Contract-Based Pricing Scheme for the Renewable Energy Trading

Shina Xu 1,2, Jingli Mao 1, and Biling Zhang 1,2
1. School of Network Education, Beijing University of Posts and Telecommunications, P. R. China
2. The State Key Laboratory of Integrated Services Networks, Xidian University, P. R. China
Abstract—The renewable energy generating terminals (REGTs)not only have capability to generate electricity for them own usage but also have surplus electricity to sell to the Power Grid (PG). However, the REGTs are generally self-interested. Due to the diversity in their supply capacity, REGT shave different preferences toward selling electricity, which is the private information and unknown to the PG. In such a case, how to stimulate different REGTs to participate the trade under the information asymmetry is a very important problem. In this paper, a novel contract-based pricing scheme is proposed for the electricity trading stimulation. To find the optimal pricing scheme, i.e., the optimal contract, an interior-point based algorithm is proposed. With the optimal contract, the PG is able to fulfill its power demand with least payment while the REGTs can obtain the maximal utilities by selecting the contract item of their own types. Simulation results are shown to verify the effectiveness of the proposed contract-based pricing mechanism. Compared to other pricing schemes, our proposed pricing scheme outperforms in incenting REGTs to sell their surplus electricity to meet the demand of PU.

Index Terms—Electricity trading, information asymmetry, contract theory, incentive mechanism, pricing scheme

Cite: Shina Xu, Jingli Mao, and Biling Zhang, “A Contract-Based Pricing Scheme for the Renewable Energy Trading," Journal of Communications, vol. 11, no. 9, pp. 848-855, 2016. Doi: 10.12720/jcm.11.9.848-855
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