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An interactive cooperation model for neighboring virtual power plants

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  • Shabanzadeh, Morteza
  • Sheikh-El-Eslami, Mohammad-Kazem
  • Haghifam, Mahmoud-Reza

Abstract

Future distribution systems will accommodate an increasing share of distributed energy resources (DERs). Facing with this new reality, virtual power plants (VPPs) play a key role to aggregate DERs with the aim of facilitating their involvement in wholesale electricity markets. In this paper, the trading strategies of a VPP in cooperation with its neighboring VPPs are addressed. Toward this aim, a portfolio of inter-regional contracts is considered to model this cooperation and maximize the energy trade opportunities of the VPP within a medium-term horizon. To hedge against profit variability caused by market price uncertainties, two efficient risk management approaches are also implemented in the VPP decision-making problem based on the concepts of conditional value at risk (CVaR) and second-order stochastic dominance constraints (SSD). The resulting models are formulated as mixed-integer linear programming (MILP) problems that can be solved using off-the-shelf software packages. The efficiency of the proposed risk-hedging models is analyzed through a detailed case study, and thereby relevant conclusions are drawn.

Suggested Citation

  • Shabanzadeh, Morteza & Sheikh-El-Eslami, Mohammad-Kazem & Haghifam, Mahmoud-Reza, 2017. "An interactive cooperation model for neighboring virtual power plants," Applied Energy, Elsevier, vol. 200(C), pages 273-289.
    • Handle: RePEc:eee:appene:v:200:y:2017:i:c:p:273-289
    DOI: 10.1016/j.apenergy.2017.05.066
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    Cited by:

    1. Natalia Naval & Jose M. Yusta, 2020. "Water-Energy Management for Demand Charges and Energy Cost Optimization of a Pumping Stations System under a Renewable Virtual Power Plant Model," Energies, MDPI, vol. 13(11), pages 1-21, June.
    2. Guoqiang Sun & Weihang Qian & Wenjin Huang & Zheng Xu & Zhongxing Fu & Zhinong Wei & Sheng Chen, 2019. "Stochastic Adaptive Robust Dispatch for Virtual Power Plants Using the Binding Scenario Identification Approach," Energies, MDPI, vol. 12(10), pages 1-23, May.
    3. Naval, Natalia & Sánchez, Raul & Yusta, Jose M., 2020. "A virtual power plant optimal dispatch model with large and small-scale distributed renewable generation," Renewable Energy, Elsevier, vol. 151(C), pages 57-69.
    4. Rakshith Subramanya & Matti Yli-Ojanperä & Seppo Sierla & Taneli Hölttä & Jori Valtakari & Valeriy Vyatkin, 2021. "A Virtual Power Plant Solution for Aggregating Photovoltaic Systems and Other Distributed Energy Resources for Northern European Primary Frequency Reserves," Energies, MDPI, vol. 14(5), pages 1-23, February.
    5. Marcjasz, Grzegorz & Narajewski, Michał & Weron, Rafał & Ziel, Florian, 2023. "Distributional neural networks for electricity price forecasting," Energy Economics, Elsevier, vol. 125(C).
    6. Zahid Ullah & Arshad & Jawad Ahmad, 2022. "The Development of a Cross-Border Energy Trade Cooperation Model of Interconnected Virtual Power Plants Using Bilateral Contracts," Energies, MDPI, vol. 15(21), pages 1-16, November.
    7. Luo, Zhe & Hong, SeungHo & Ding, YueMin, 2019. "A data mining-driven incentive-based demand response scheme for a virtual power plant," Applied Energy, Elsevier, vol. 239(C), pages 549-559.
    8. Bianca Goia & Tudor Cioara & Ionut Anghel, 2022. "Virtual Power Plant Optimization in Smart Grids: A Narrative Review," Future Internet, MDPI, vol. 14(5), pages 1-22, April.
    9. Naval, Natalia & Yusta, Jose M., 2021. "Virtual power plant models and electricity markets - A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    10. Shaw-Williams, Damian & Susilawati, Connie, 2020. "A techno-economic evaluation of Virtual Net Metering for the Australian community housing sector," Applied Energy, Elsevier, vol. 261(C).
    11. Amit Kumer Podder & Sayemul Islam & Nallapaneni Manoj Kumar & Aneesh A. Chand & Pulivarthi Nageswara Rao & Kushal A. Prasad & T. Logeswaran & Kabir A. Mamun, 2020. "Systematic Categorization of Optimization Strategies for Virtual Power Plants," Energies, MDPI, vol. 13(23), pages 1-46, November.
    12. Mahmud, Khizir & Khan, Behram & Ravishankar, Jayashri & Ahmadi, Abdollah & Siano, Pierluigi, 2020. "An internet of energy framework with distributed energy resources, prosumers and small-scale virtual power plants: An overview," Renewable and Sustainable Energy Reviews, Elsevier, vol. 127(C).
    13. Qiu, Dawei & Baig, Aimon Mirza & Wang, Yi & Wang, Lingling & Jiang, Chuanwen & Strbac, Goran, 2024. "Market design for ancillary service provisions of inertia and frequency response via virtual power plants: A non-convex bi-level optimisation approach," Applied Energy, Elsevier, vol. 361(C).
    14. Yu, Songyuan & Fang, Fang & Liu, Yajuan & Liu, Jizhen, 2019. "Uncertainties of virtual power plant: Problems and countermeasures," Applied Energy, Elsevier, vol. 239(C), pages 454-470.
    15. Yoo, Yoon-Sik & Newaz, S.H. Shah & Shannon, Peter David & Lee, Il-Woo & Choi, Jun Kyun, 2018. "Towards improving throughput and reducing latency: A simplified protocol conversion mechanism in distributed energy resources network," Applied Energy, Elsevier, vol. 213(C), pages 45-55.
    16. Wang, Xuebin & Chang, Jianxia & Meng, Xuejiao & Wang, Yimin, 2018. "Short-term hydro-thermal-wind-photovoltaic complementary operation of interconnected power systems," Applied Energy, Elsevier, vol. 229(C), pages 945-962.
    17. Guo, Hongye & Chen, Qixin & Xia, Qing & Kang, Chongqing, 2019. "Electricity wholesale market equilibrium analysis integrating individual risk-averse features of generation companies," Applied Energy, Elsevier, vol. 252(C), pages 1-1.
    18. Ju, Liwei & Zhao, Rui & Tan, Qinliang & Lu, Yan & Tan, Qingkun & Wang, Wei, 2019. "A multi-objective robust scheduling model and solution algorithm for a novel virtual power plant connected with power-to-gas and gas storage tank considering uncertainty and demand response," Applied Energy, Elsevier, vol. 250(C), pages 1336-1355.
    19. Zhou, Kaile & Peng, Ning & Yin, Hui & Hu, Rong, 2023. "Urban virtual power plant operation optimization with incentive-based demand response," Energy, Elsevier, vol. 282(C).
    20. Alam, Khandoker Shahjahan & Kaif, A.M.A. Daiyan & Das, Sajal K., 2024. "A blockchain-based optimal peer-to-peer energy trading framework for decentralized energy management with in a virtual power plant: Lab scale studies and large scale proposal," Applied Energy, Elsevier, vol. 365(C).
    21. Zhengwei Huang & Lu Liu & Jiachang Liu, 2023. "Multi-Time-Scale Coordinated Optimum Scheduling Technique for a Multi-Source Complementary Power-Generating System with Uncertainty in the Source-Load," Energies, MDPI, vol. 16(7), pages 1-22, March.

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