Participation of demand response resources through virtual power plant: A decision framework under uncertainty

Demand response (DR) resources need to be integrated for participating in wholesale electricity markets. This paper evaluates the integration of a DR resource into a virtual power plant (VPP) trading in the day-ahead and the balancing markets under uncertainty. The impact of this integration on its energy procurement cost and also on the expected profit of VPP is analyzed via stochastic programming. This participation is compared with the DR program implemented by the distribution system operator. This approach provides a decision framework for a dispatchable load owner to decide between integration and not integration into an available VPP considering DR program afoot. Demand uncertainty, non-curtailable load, marginal cost of curtailment, time-of-use tariffs as a common DR program, and uncertainties of wholesale prices and renewables integrated into VPP are taken into account. Furthermore, the consequent variations in the demand curve due to the integration are illustrated.