Commercial Demand Response in Virtual Power Plants

Abstract

Global economy growth, continuous development and the extensive use of technologies by consumers is increasing the demands of consumers for a reliable and efficient energy supply. Along with the rising energy consumption in the world, new technologies will influence the way we generate, distribute and consume energy. Alongside others, distributed energy generation is expected to become a major trend in many countries. The fast upward penetration of Distributed Energy Resources (DER) and the ongoing trend towards a more competitive electricity market requires new technologies and policies to handle emerging technical and economic issues. In order to handle distributed generation and to increase its participation within power markets, the idea of a Virtual Power Plant (VPP) has emerged. The concept of a VPP is recognized as an effective option to aggregate and operate DER and allowing for wholesale energy market participation to provide the required flexibility services to the local grid. Also, many DERs are available in urban areas and exploiting the flexibility of a VPP and developing a robust business case requires advanced considerations on their technical and commercial constraints and trade-offs in developing the VPP's operations regarding flexibility when simultaneously participating in the market. Considering the potential of activating commercial consumers in demand response programs, this paper proposes a new framework for energy scheduling of a distribution grid based on the concept of a technical virtual power plant (TVPP). This concept aims to enhance the flexibility of the grid, while contributing to an increase in the quality and reliability of the system, which also brings economic benefits. In this paper, a stochastic mixed-integer linear programming (MILP) optimization model was developed, which guarantees that the global optimum solution is obtained, in this case, maximizing the total profit of a TVPP. Regarding operational constraints, the TVPP allows the presence of commercial buildings and other distributed energy resources a day-ahead (DA) electricity market, as a price maker agent. In this context, this paper presents a comprehensive, integrated techno-economic approach that assesses the technical constraints and commercial flexibility opportunities. The case study includes the VPP's energy scheduling, improving system reliability by improving the voltage profile, and demand response and main commercial customers' assets (electric vehicles (EVs) parking lots and Heating Ventilation and Air Condition (HVAC) systems) aggregation and management. The model is tested using the IEEE 119-Bus test system, and results show that with the optimal management of DER, EVs parking lots and HVAC systems in commercial buildings allows the TVPP to increase its profit, by a percentage of 49,23%.