Bargaining Game-Based Profit Allocation of Virtual Power Plant in Frequency Regulation Market Considering Battery Cycle Life

Abstract

Distributed energy resources (DERs) such as rooftop photovoltaic (PV) systems, battery energy storage systems (BESSs), and controllable loads can be aggregated as virtual power plants (VPPs) to provide frequency regulation services for managing power system stability. Optimizing the profits of PV-BESS VPPs in frequency control markets can demonstrate their profitability and encourage more PV-BESS consumers to join VPPs to support the grid. This article proposes an optimal bidding strategy of a PV-BESS VPP in frequency control ancillary services (FCAS) markets, and a joint bidding strategy of the VPP in cooperation with a wind farm, which aims to maximize their cooperation profits. Moreover, the battery cycle life is systematically considered and incorporated in the proposed bidding models. In addition, a payoff allocation approach based on Nash-Harsanyi Bargaining Solution is innovatively developed to allocate the extra profit of the cooperation. The proposed approach is expected to allocate the VPP with a reasonable share and reflect its real contribution in cooperation. The simulation results verify the feasibility and effectiveness of the proposed bidding models and the payoff allocation approach.