A profit sharing scheme for distributed energy resources integrated into a virtual power plant

Rahim Dabbagh and Mohammad Kazem Sheikh-El-Eslami

Applied Energy, 2016, vol. 184, issue C, 313-328

Abstract: Independent owners of distributed energy resources (DERs) can be integrated to form a coalition in order to trade in either retail markets (under predetermined tariffs) or wholesale markets using the virtual power plant (VPP) concept. The consequent coordinated operation of DERs entails a surplus profit in respect to the summation of their individual profits. In this paper, the reasons behind such a surplus profit are evaluated. The transactions virtually taken place inside the coalition are defined, classified and priced in order to provide a profit sharing scheme for the integrated DERs. The VPP dispatching center can implement this scheme for trading in both energy and reserve markets, as well as under both dual and single pricing systems in the balancing (real-time) market. This study shows that how the amount and price of the internal transactions in each class, and as a result, the allocated profits depend on the difference between sale and purchase prices in real-time and the risk-aversion level of DERs facing the uncertainties. The proposed framework is compared with the existing cooperative Game theory-based methods. The comparison shows that it has a much lower computational burden. It is also more comprehensible and more acceptable to DER owners.

Keywords: Cooperative game; Distributed energy resources; Profit allocation; Virtual power plant (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (22)

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DOI: 10.1016/j.apenergy.2016.10.022

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