Presenting an economic interaction bi-level model between electricity retailer and customer in bilateral electricity market contract

Players, especially electricity retailers have an important role in achieving optimal economic models in the electricity market. They act as intermediaries between customers and energy suppliers. In this regard, this study proposed an interactive bi-level model in bilateral electricity contracts from the retailer’s viewpoint. At the first level of this interaction, the retailer maximizes its profit by selecting some customers and determining the length of the bilateral contract with each customer. At the second level, customer cost is minimized based on new interactive parameters that are introduced for maximum interaction. In this regard, the optimal amount of energy sales to each customer is also determined based on the proposed bi-level model. Finally, after linearization and determination of the single-level equivalent of the proposed model, the mixed-integer linear programming (MILP) model will be implemented in GAMS software and solved via the CPLEX solver. The results indicate the effect of the proposed interactive model on maximizing retailer profit and minimizing customer costs in bilateral electricity contracts.