Offering Model for Optimization of Virtual Power Plant Operation in Electricity Market

Abstract

Distributed Energy Sources based on renewable generation have an important place in power systems due to liberalization of electricity markets and increase of environmental problems. The involvement of renewable energy sources (RES) in the energy market poses a serious challenge for RES owners. The main reason for this is the uncertainty about the power output of RES. For example, the power output of wind power plants (WPP) depends on the wind speed and the power output of solar power plants (SPS) depends on the solar radiation and clouds. This brings the risk of not meeting long-term or medium-term electricity delivery contracts. To remove this risk, a single-acting unit in electricity market is formed by combining different types of renewable and non-renewable generation units and storage systems. This unit is defined as Virtual Power Plants (VPP). In this study, an hourly operation scheduling is modeled to get maximum profit for VPP owner participating in day ahead market by saling or purchasing electricity. The VPP in the study consists of wind power plant, conventional power plant and energy storage system. The problem is formulated as a mixed-integer non-linear problem, applied for 24-hours time horizon and tested in GAMS software. The applicability of the method has been demonstrated by showing that the proposed method helps VPP owner about how to provide optimum sale/purchase bids in the day ahead market.