Energy Management in Renewable-Based Supply Chain with Considering Demand-Side Flexibility

Despite the benefits of renewable resources in the network, uncertainties in renewable generation can impose multiple challenges in efficient operation of electricity supply chain in both supply and demand side. So, integration of distributed renewable generations in electricity markets through adaptive solutions to address the uncertainties should be investigated. In this regard, in this chapter, energy management of a renewable-based supply chain is investigated in which, in one layer, a wind power producer (WPP) offers strategically in electricity market while in the other layer, the DSO minimizes its operating costs. Also, to smooth the variations of the WPP, employing of demand response programs and transition of consumers into prosumers are also considered as efficient options. So, through the energy transactions in local electricity market, the WPP, DSO and loads are considered in a three-tier supply chain which is modeled as a bi-level problem in which the WPP maximizes its expected profit while the DSO minimizes its operating costs. By using Karush–Kuhn–Tucker optimality conditions the achieved problem is recast to a single-level one.