In distribution market, because there are a lot of uncertainty factors such as price and load, so it is a big problem to balance benefit and risk for generation and distribution companies. Since they are both inclined to avoid the market risk, in order to make the most profit for both companies, a purchase and sell model in distribution market based on contract is proposed in this paper. And a power repurchase term is added in the contract to avoid the risk incurred by load fluctuation. Using CVaR(conditional risk at value) as the risk measuring criterion, a two-layer schedule model is set up to simulate the sale and purchase behaviors of generation and distribution companies. And the optimal power sale price for generation company and optimal power purchase quantity for distribution company are calculated by this model. As the case shows, by setting the different risk level, their market characteristics and relationship also change but always follow the risk avoiding rule. So the model can reduce the risk in distribution market for both companies under certain conditions.
Strategic Hedging for System Risks of Generation Company
