Large-scale aggregation of prosumers toward strategic bidding in joint energy and regulation markets

Xiangsheng Xiao, Jianxiao Wang, Rui Lin, David J. Hill and Chongqing Kang

Applied Energy, 2020, vol. 271, issue C, No S0306261920306711

Abstract: Increased penetration of distributed energy resources is unleashing the flexibility of large-scale prosumers in deregulated markets. To explore prosumers’ potential market revenues, some existing studies have focused on the strategic bidding of prosumers aggregation. A majority of those studies assume the price-taker role of the aggregator while a few studies assume the price-maker role of the aggregator. However, it remains an open question as to how the increasing number of prosumers influences the profit of a strategic aggregator. Therefore, we conduct a numerical analysis in this paper to quantify the profits of aggregating large-scale prosumers. A stochastic bi-level optimization model is proposed to depict the strategic behavior of prosumers aggregation bidding in joint energy and regulation markets. This bi-level model is transformed into a mixed-integer linear programming model by employing the Karush-Kuhn-Tucker conditions based on strong duality theory. Case studies based on 120,000 prosumers from Australia demonstrate that the strategic bidding behavior of an aggregator can lead to a 7.5% decrease in operation costs, and increasing the number of prosumers will lead to a larger gap between non-strategic and strategic behavior.

Keywords: Multi-market; Bi-level optimization; Distributed energy resource; Prosumer; Strategic bidding (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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DOI: 10.1016/j.apenergy.2020.115159

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