Strategic Management of Vpp For Deregulated Energy Markets In Smart Grid Environments

Abstract

Virtual Power Plants (VPPs) represent a paradigm shift in modern power systems, serving as a virtual aggregation of decentralized energy resources including renewable generators, energy storage units, and flexible demand-side assets. Unlike traditional centralized power stations, VPPs coordinate a multitude of geographically dispersed energy sources through advanced digital platforms. Their primary objective is to optimize energy production, reduce environmental impacts, and enhance grid stability. VPPs facilitate the seamless integration of Distributed Energy Resources (DERs) such as solar PV, wind turbines, battery storage systems, and demand response programs into the grid, thereby supporting the transition to a more decentralized, sustainable, and resilient energy system. This research offers an extensive study of the strategic management of VPPs within deregulated market structures, focusing on integrating Distributed Energy Resources (DERs) into energy markets in a secure, scalable, and economically feasible manner. The thesis begins by formulating a dual-layer energy scheduling framework for VPPs that coordinates resource participation in both Day-Ahead and Real-Time Markets. Employing Mixed Integer Linear Programming (MILP), the system dynamically allocates resources across time intervals to maximize profit and efficiency, while accounting for forecast uncertainties in both generation and load. The optimization framework also incorporates the operational characteristics of controllable and noncontrollable DERs, ensuring a realistic and robust market participation strategy. A major emphasis of this work lies in improving the economic operation of VPPs within competitive electricity markets. The economic viability of VPPs hinges on their ability to optimally schedule resources not only for profit maximization but also for market reliability. By actively participating in both energy and ancillary service markets, VPPs offer capacity, frequency regulation, and spinning reserve services.