Hybrid uncertainty‐based offering strategy for virtual power plants

Abstract

This study proposes an optimal day-ahead (DA) electricity market offering model for a virtual power plant (VPP) formed by a mix of renewable distributed energy resources along with energy storage, such as electric vehicles. Two sources of uncertainty are considered, namely, wind power generation, modelled by an uncertainty set, and DA market price, modelled by scenarios. Opposite to classical robust optimisation approaches, the authors model maps minimal (worst-case) profits to a conservativeness parameter, while the classical robust optimisation maps conservativeness parameter to worst-case profits. In this regard, by using their optimisation framework, a VPP operator only deals with setting a minimum-profit constraint, which is more sensible and easy for interpretation, while the required conservativeness is endogenously determined. The proposed mathematical model for constructing the offering curve is a hierarchical four-level robust optimisation problem. The first level represents the optimal decision on the price-quantity offer bids; the second-and third-level relate to the optimal identification of conservativeness parameter; and the fourth-level represents the optimal operation of the VPP managed assets. The four-level model is reformulated as a single-level mixed-integer linear programming problem. The proposed approach and its applicability are verified using numerical simulations.

Business decision-making of power generators in competitive electricity market

“…Unlike in the study of Loukatou et al [7] , in which energy storage was set to be represented in the control variables, energy storage was involved herein to ensure that power generators can make electricity sales decisions, and that the energy storage cost is set as a deterministic variable. Building upon references [37] , [38] , [39] from the literature, we developed a virtual power plant model that acts both as a producer and a retailer. This model needs to be a price taker, where electricity can only be sold at the market price.…”

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