Integration Of Contract For Difference In The Minimization Of Energy Cost Of A Distribution Utility

High cost of electricity makes it important for the distribution utilities DUs to allocate their energy requirements in the least cost manner. In the current Philippine set-up energy requirements of DUs are allocated in spot market and bilateral contract. Given the volatility of the WESM Wholesale Electricity Spot Market prices and that the bilateral contract price may be either higher or lower than the WESM price the contract for difference CFD provides an alternative for the bilateral contract. This study developed a methodology for scheduling the economic purchase of energy that yield to lower purchase cost of DU. The methodology includes forecasting the nodal load and spot market price and energy allocation optimization. Results showed that the optimization engine was able to generate an optimal set of energy allocations and that the integration of CFD yield to a reduction of purchase cost of DU which in turn reduced the cost of electricity for consumers.