Incentive-based Demand Response for a Virtual Power Plant

Abstract

With the development of Energy Internet, the virtual power plant (VPP) has been regarded as a creative and attractive form to realize the integration of different energy resources. The VPP could make advantages of demand-side participation and distributed energy resources (DERs) to eliminate the peak loads and thus to maintain the stability of power grid. Here, an incentive-based demand response (DR) scheme is designed to model the energy transactions in the VPP internal market. This scheme considers different attitudes of different kinds of consumers according to their DR bid offers. Especially, we also introduce the dissatisfaction function to model the impact of load reductions on the enthusiasm of consumers. With the objective to minimize VPP operation costs, the proposed scheme is formulated as an optimization problem with guaranteeing the interests of consumers. The experimental results show that the proposed incentive-based DR scheme could encourage consumers to reduce more load demands by offering corresponding incentive prices, which helps to decrease the total operation cost of the VPP and also improve the profits of consumers.