Optimal dispatch and bidding strategy of a virtual power plant based on a Stackelberg game

Abstract

The virtual power plant is a new type of energy management platform, which can aggregate a variety of distributed energy resources as a single generation unit to participate in the electricity market. When intermittent renewables make up a large share of the VPP, it will lead to high penalty costs in electricity market transactions. Therefore, it is necessary to optimize the internal power output and trading strategy of the virtual power plants to improve the overall operational economy. This paper deeply analyses the trading mechanism of the electricity market and models the risk cost of virtual power plants in the electricity market. Then a Stackelberg game model is established and the objective function is established to maximize the profit of the virtual power plant and minimize the cost of purchasing electricity by users. Finally, the results of a realistic case study are provided to show that the proposed approach can reduce the bidding bias of a virtual power plant in the electricity market, increase operating profit and reduce the cost of electricity purchasing. In addition, the impact of the load type and bidding method on the economy on a virtual power plant is analysed.