Cost / Revenue Based Electricity Pricing on Deregulated Market

Rui Li*, Luonan Chen, Ryuicni Yokoyama

*Corresponding author for this work

    Research output: Chapter in Book/Report/Conference proceedingConference contribution


    This paper aims to propose a theoretical method to derive reasonable electricity prices for the utility and the consumers in the market, which not only reflects the market mechanism but also ensures retrieving the expenses to be completely recovered during the operation. Specifically, by assuming that purchasing prices from power producers are determined by biddings, auctions or negotiations, the derivation problem of prices on load buses is formulated as a nonlinear optimization problem. The mathematical formulation used here has almost the same form as the conventional OPF except for additional variables corresponding to electricity prices of consumers. The marginal principle has been used to compute the load prices. This paper focuses on finding equilibrium of price among an electric utility, independent power producers and consumers. The lowest affordable load price is determined to prevent the management from dropping into loss for the utility.

    Original languageEnglish
    Title of host publicationProceedings of the Universities Power Engineering Conference
    Number of pages4
    Publication statusPublished - 2002
    EventUPEC 2002, 37th International Universities' Power Engineering Conference - Stafford
    Duration: 2002 Sept 92002 Sept 11


    OtherUPEC 2002, 37th International Universities' Power Engineering Conference


    • Deregulation
    • Electricity price
    • Marginal cost
    • Marginal Revenue
    • Optimal power flow

    ASJC Scopus subject areas

    • General Engineering
    • General Energy


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