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A Pricing Strategy for Key Customers: A Method Considering Disaster Outage Compensation and System Stability Penalty

Author

Listed:
  • Seonghyeon Kim

    (School of Electrical Engineering, Korea University, Seoul 02841, Republic of Korea)

  • Yongju Son

    (School of Electrical Engineering, Korea University, Seoul 02841, Republic of Korea)

  • Hyeon Woo

    (School of Electrical Engineering, Korea University, Seoul 02841, Republic of Korea)

  • Xuehan Zhang

    (College of Electrical Engineering and Automation, Fuzhou University, Fuzhou 350116, China)

  • Sungyun Choi

    (School of Electrical Engineering, Korea University, Seoul 02841, Republic of Korea)

Abstract

When power system equipment fails due to disasters, resulting in the isolation of parts of the network, the loads within the isolated system cannot be guaranteed a continuous power supply. However, for critical loads—such as hospitals or data centers—continuous power supply is of utmost importance. While distributed energy resources (DERs) within the network can supply power to some loads, outages may lead to compensation and fairness issues regarding the unsupplied loads. In response, this study proposes a methodology to determine the appropriate power contract price for key customers by estimating the unsupplied power demand for critical loads in isolated networks and incorporating both outage compensation costs and voltage stability penalties. The microgrid under consideration comprises DERs—including electric vehicles (EVs), fuel cell electric vehicles (FCEVs), photovoltaic (PV) plants, and wind turbine (WT) plants—as well as controllable resources such as battery energy storage systems (BESS) and hydrogen energy storage systems (HESS). It serves both residential load clusters and critical loads associated with social infrastructure. The proposed methodology is structured in two stages. In normal operating conditions, optimal scheduling is simulated using second-order conic programming (SOCP). In the event of a fault, mixed-integer SOCP (MISOCP) is employed to determine the optimal load shedding strategy. A case study is conducted using the IEEE 123 bus test node system to simulate the outage compensation cost calculation and voltage penalty assessment processes. Based on this analysis, a contract price for key customers that considers both disaster-induced outages and voltage impacts is presented.

Suggested Citation

  • Seonghyeon Kim & Yongju Son & Hyeon Woo & Xuehan Zhang & Sungyun Choi, 2025. "A Pricing Strategy for Key Customers: A Method Considering Disaster Outage Compensation and System Stability Penalty," Sustainability, MDPI, vol. 17(10), pages 1-28, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:10:p:4506-:d:1656487
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    References listed on IDEAS

    as
    1. Xuehan Zhang & Yongju Son & Sungyun Choi, 2022. "Optimal Scheduling of Battery Energy Storage Systems and Demand Response for Distribution Systems with High Penetration of Renewable Energy Sources," Energies, MDPI, vol. 15(6), pages 1-18, March.
    2. Masoumeh Sharifpour & Mohammad Taghi Ameli & Hossein Ameli & Goran Strbac, 2023. "A Resilience-Oriented Approach for Microgrid Energy Management with Hydrogen Integration during Extreme Events," Energies, MDPI, vol. 16(24), pages 1-18, December.
    3. Zhang, Xuehan & Son, Yongju & Cheong, Taesu & Choi, Sungyun, 2022. "Affine-arithmetic-based microgrid interval optimization considering uncertainty and battery energy storage system degradation," Energy, Elsevier, vol. 242(C).
    4. Hyeon Woo & Yongju Son & Jintae Cho & Sungyun Choi, 2022. "Stochastic Second-Order Conic Programming for Optimal Sizing of Distributed Generator Units and Electric Vehicle Charging Stations," Sustainability, MDPI, vol. 14(9), pages 1-19, April.
    5. Alexandre F. M. Correia & Pedro Moura & Aníbal T. de Almeida, 2022. "Technical and Economic Assessment of Battery Storage and Vehicle-to-Grid Systems in Building Microgrids," Energies, MDPI, vol. 15(23), pages 1-23, November.
    6. Tostado-Véliz, Marcos & Rezaee Jordehi, Ahmad & Fernández-Lobato, Lázuli & Jurado, Francisco, 2023. "Robust energy management in isolated microgrids with hydrogen storage and demand response," Applied Energy, Elsevier, vol. 345(C).
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