Optimal Scheduling of Synthetic Reserves Provided by Virtual Power Plants

Large number of distributed energy resources are aggregated to form virtual power plants and to provide flexibility services to the grid operator. In vertically integrated utility environments, virtual power plants can participate in the reserves mix to potentially offset fuel-based generation. Optimal allocation of resources internally and within the VPP decreases generation costs, increases efficiency and utilization of renewable energy resources. This paper discusses an optimization methodology to minimize generation costs for a virtual power plant aggregating multiple types of resources to participate in the reserves mix of a vertically integrated utility environment. The stochastic optimization is formulated as a mixed-integer linear programming model. Human behaviour related uncertainties in consumer side are dealt with the Markov-chain approach.