Methods for optimal risk-averse demand contracting strategy in distribution companies: A Brazilian case study

This paper proposes a new methodological framework to support the decision of Brazilian distribution companies (DISCOs) when defining maximum demand contracts with the transmission system. The contract must be established one year ahead, and several uncertainties associated to loads, distributed generation (DG) and internal grid contingency events, should be considered. The optimal contracting decision should take into account the risk profile of DISCO's stakeholders and the interest of final consumers. To tackle these topics, an engineering-based approach is proposed in which a chain of four methods composes the final solution approach. To ensure realistic and tractable solutions, load and DG time series are decomposed into low and high frequencies to address the challenge of deriving long-term probabilistic forecasts for high-dimensional time series in high frequency. The proposed methodology considers exogenous long-term trend drivers (such as economic and climatic indices) in the probabilistic forecasts of loads and DG, as well as corrective actions to respond against contingencies in the power flow simulation. Results for a Brazilian DISCO show that the proposed probabilistic forecasts are adherent and tractable. Our case study corroborates the effectiveness of our approach to support DISCOs' decision and adjust their contracts based on pre-specified risk levels.