Joint Optimized Operation of Electricity Spot and Reserve Markets Considering Bidding Strategies for Virtual Power Plants

Abstract

As the reform of electricity marketization advances, the virtual power plant (VPP), as an emerging market participant, is being progressively incorporated into the trading scope of both the electricity spot market (ESM) and the reserve market (RM). Due to its flexible regulation capabilities, the bidding strategies of VPPs in the electricity market are complex and variable, presenting new challenges to the joint operation of power markets. In this context, first, based on the interactive game relationships among multiple market entities under the operating mechanisms of the spot and reserve markets, this paper designs a principal-follower game framework for transactions in these markets with the VPP as the main entity. Second, it constructs a two-level joint optimized bidding strategy model for VPP participation in the spot and reserve markets, where the inner layer is the VPP’s optimized bidding strategy model aiming to maximize the total revenue from the spot and reserve markets; the outer layer is the spot and reserve market clearing model targeting the minimization of the total electricity purchasing cost for society. Finally, the simulation case analysis shows that the proposed method can achieve joint optimal operation of the electricity spot and reserve markets by considering the VPP bidding strategy, resulting in a 1.42% reduction in the total electricity purchase cost of the power market.

Keywords

• Virtual power plant
• electricity spot market
• reserve market
• bi-level joint bidding strategy model
• Stackelberg leader-follower game