Abstract
Under the electricity market environment, power generation companies (GenCos) can either sell electricity through the spot market or sell them through bilateral contracts. GenCos have to make electricity allocation strategies among different trading choices facing uncertainty of spot market prices. In addition, uncertainty of the emission price is increasing and will become an important risk factor for fossil fuel GenCos. In this paper, we develop a risk decision model for fossil fuel GenCos’ electricity allocation based on the prospect theory, which considers GenCos’ loss aversion characteristic. Under uncertainties of the electricity spot market price and emission price, the model maximizes the GenCo’s overall prospect value through allocating reasonably electricity between the spot market and bilateral contracts. The simulation results show that GenCos’ psychological expected profit and loss aversion characteristic have significant effects on their risk decision-making. As uncertainty of the emission price increases, fossil fuel GenCos will increase electricity sale in the spot market.
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Zhang, Y., Zhang, S. (2017). Prospect Theory Based Electricity Allocation for GenCos Considering Uncertainty of Emission Price. In: Li, K., Xue, Y., Cui, S., Niu, Q., Yang, Z., Luk, P. (eds) Advanced Computational Methods in Energy, Power, Electric Vehicles, and Their Integration. ICSEE LSMS 2017 2017. Communications in Computer and Information Science, vol 763. Springer, Singapore. https://doi.org/10.1007/978-981-10-6364-0_28
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DOI: https://doi.org/10.1007/978-981-10-6364-0_28
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