Stochastic framework for strategic decision-making of load-serving entities for day-ahead market

Mohammad Ali Fotouhi Ghazvini, Pedro Faria, Hugo Morais, Zita Vale, Sergio Ramos

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

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The deregulation of electricity markets has diversified the range of financial transaction modes between independent system operator (ISO), generation companies (GENCO) and load-serving entities (LSE) as the main interacting players of a day-ahead market (DAM). LSEs sell electricity to end-users and retail customers. The LSE that owns distributed generation (DG) or energy storage units can supply part of its serving loads when the nodal price of electricity rises. This opportunity stimulates them to have storage or generation facilities at the buses with higher locational marginal prices (LMP). The short-term advantage of this model is reducing the risk of financial losses for LSEs in DAMs and its long-term benefit for the LSEs and the whole system is market power mitigation by virtually increasing the price elasticity of demand. This model also enables the LSEs to manage the financial risks with a stochastic programming framework.
Original languageEnglish
Title of host publicationProceedings of 2013 IEEE Powertech Grenoble
Number of pages6
Publication date2013
ISBN (Print)9781467356695
Publication statusPublished - 2013
Externally publishedYes
Event2013 IEEE Grenoble PowerTech Conference - Grenoble, France
Duration: 16 Jun 201320 Jun 2013


Conference2013 IEEE Grenoble PowerTech Conference
Internet address


  • Power, Energy and Industry Applications
  • Demand-side
  • Load-serving entities
  • Locational marginal price
  • Market power
  • Stochastic programming


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