To further liberalize the retail electricity market, this paper establishes a novel active distribution system market (ADSM) to encourage the new entries of micro virtual power plants (μVPPs) as prosumers. μVPPs compete with traditional retailers by submitting price-quantity bids/offers for energy and reserve resources. The joint operation of energy and reserve market is modeled as a bilevel equilibrium problem with equilibrium constraints (EPEC) with an upper-level objective that maximizes all μVPPs' profit and a lower level objective that maximizes social welfare of the market clearing process. A coevolutionary approach is successfully employed to determine the pure strategy Nash equilibrium of the EPEC model. The case studies demonstrate the effectiveness of the coevolutionary method and show that μVPPs' bidding/offering strategies depend significantly on the penetration level of distributed energy resources and renewable energy sources and they can be considerably influenced by rivals' strategies. This paper then compares μVPPs' performances under different market structures and addresses the advantages of the proposed ADSM in terms of higher asset utilization rate, higher economic profit, and more secured return on investment.
|Early online date||5 Apr 2017|
|Publication status||Published - 7 Jun 2017|