Integration of DERs in the Aggregator Platform for the Optimal Participation in Wholesale and Local Electricity Markets

Abstract

This paper aims to present a novel optimization model for the offering strategy of a distributed energy resource aggregator (DER AG) as a price-maker entity in the local electricity market (LEM). Accordingly, the DER AG integrates various non-dispatchable and dispatchable generation units as well as energy storage systems to submit its offers to the operator of the LEM. The operator settles the LEM based on received offers from the DER AG and its rivals in the electricity distribution network. On the other hand, since this agent aggregates a considerable number of DERs' capacity at the local level, the simultaneous participation of the DER AG as a price-taker player in the wholesale electricity market (WEM) is provided as well. To address the raised decision-making problem, a bi-level programming method is employed in this work. In this regard, the upper-level (UL) of the problem attempts to maximize the DER AG's expected profit from taking part in both LEM and WEM, while the lower-level (LL) seeks to clear the LEM through maximizing the social welfare. Ultimately, a typical case study is implemented to investigate the impact of simultaneous involvement in both markets on DER AG's optimal performance.