Multisources of Energy Contracting Strategy with an Ecofriendly Factor and Demand Uncertainties

Abstract

This study presents a mathematical formulation to optimize contracting capacity strategiesof multisources of energy for institutional or industrial consumers considering demand uncertainties.The objective consists of minimizing the total costs composed of the different types of energy contractcapacity costs, penalty price, and an ecofriendly factor. The penalty price is charged on the demand ofenergy exceeding the total contract capacities. The ecofriendly factor encourages the use of renewableenergy and reduces the traditional energy used in the optimal mix of energy sources. The proposedmodel is tested based on demand of energy inspired from real data. These numerical experiments areanalyzed to illustrate the impact of encouraging the use of renewable energy sources by introducingthe ecofriendly factor and the influence of penalty price and uncertainty in the demand of energy.The results show that in the presence of low penalty price or low uncertainty a large amount ofecofriendly support is needed for using more renewable energy sources in the optimal contractcapacity combination.