Electricity Market Equilibrium Analysis for Strategic Demand Aggregators: The Value of Demand Flexibility Portfolios' Mix

Tools for energy market equilibrium analysis are important for both market participants as well as policy makers towards finding efficient equilibria that serve the goals of the required energy transition. In this paper, an imperfect electricity market with strategic demand aggregators is modeled as an Equilibrium Problem with Equilibrium Constraints (EPEC). We model several types of distributed flexibility assets and energy resources that can be included in a typical demand flexibility portfolio. We quantify the value of demand flexibility portfolios' mix with respect to demand aggregators' cost and social welfare as a function of time for a typical day-ahead market scenario. The impact of possible future flexibility investments is also demonstrated showing how a strategic aggregator's investment decision affects other competing aggregators' business, too.