Optimal decision making for Virtual Power Plant operation

Abstract

As penetration level of distributed generation (DG) is increasing in distribution networks; new players are introduced into the markets which significantly increase the uncertainties in the system. The concept of Virtual Power Plants (VPPs) is a practical approach to deal with increased uncertainty and complication in future power systems. In such situation, a distribution network is no more passive in nature and takes on many of the characteristics of a transmission network. Therefore, it is relevant to consider the applicability of some pricing mechanisms in distribution network such as nodal pricing. The aim of this paper is to propose new methodology based on nodal pricing for optimal operation of a VPP in profit maximization of its owner.