Investigating the Impact of External Demand Response Flexibility on the Market Power of Strategic Virtual Power Plant

Abstract

In this paper, a decision-making framework is proposed for a virtual power plant (VPP) to participate in day-ahead (DA) and regulating market (RM) considering internal demand response (IDR) flexibility. In the proposed model, a DR exchange market (DRXM) is also introduced to cover deviations of uncertain resources and decrease VPP's imbalance penalties in the RM. The VPP can optimize its procurement expenditures by providing DR services from both IDR providers and DRXM. A market inefficiency index (MII) is defined to analyze the effect of trading energy in the DRXM on the market power of the VPP. The proposed model is formulated as a bi-level problem, in which at the upper level, the VPP maximizes its profit while at the lower level, the distribution system operator (DSO) strives to clear both DA and RM markets to maximize social welfare. The proposed problem is nonlinear and converted into a linear single-level problem through Karush-Kuhn-Tucker (KKT) optimality conditions and duality theory. The simulation results show that in high external demand response (EDR) participants, the expected profit of the VPP augments about 3% which is a substantial value for the one-day scheduling horizon. Furthermore, by providing EDR services, MII reduces which implies the EDRs preserve their economic surplus.

Research on multi-form flexible resource aggregation model of virtual power plant based on cloud model

“…Literature [5] a proposes the aggregation method of distributed resources that can always consider risks. Literature [6][7][8] response characteristics of distributed energy sources are analyzed and the strategies for optimal aggregation are discussed. In Literature [9], the refined demand response model of virtual power plant was constructed, and the benefit coefficient of demand response was calculated by two long and short-term memory networks to give full play to the user-side demand response and improve the overall economy [10].…”

Electricity-Carbon Interactive Optimal Dispatch of Multi-Virtual Power Plant Considering Integrated Demand Response

“…Against the background of global energy shortage and severe environmental pollution, the development of WT, PV and other new energy is of great importance to promote a low-carbon cycle economy and increase the share of non-fossil energy consumed [1]. In recent years, the growth of distributed energy resources especially WT and PV has been particularly rapid [2].…”