Investigating the Impact of External Demand Response Flexibility on the Market Power of Strategic Virtual Power Plant

In this paper, a decision-making framework is proposed for virtual power plant (VPP) to participate in day-ahead (DA) and regulating market (RM) considering internal demand response (IDR) flexibility. the model, DR exchange (DRXM) also introduced cover deviations of uncertain resources decrease VPP’s imbalance penalties RM. The VPP can optimize its procurement expenditures by providing services from both IDR providers DRXM. A inefficiency index (MII) defined analyze effect trading energy DRXM on VPP. model formulated as bi-level problem, which at upper level, maximizes profit while lower distribution system operator (DSO) strives clear DA RM markets maximize social welfare. problem nonlinear converted into linear single-level through Karush-Kuhn-Tucker (KKT) optimality conditions duality theory. simulation results show that high external (EDR) participants, expected augments about 3% substantial value one-day scheduling horizon. Furthermore, EDR services, MII reduces implies EDRs preserve their economic surplus.