A BRP-VPP Coordination Framework for Risk Management in Electricity Markets

Balancing Responsible Parties (BRPs) and Virtual Power Plants (VPPs) coexist within contemporary power systems, operating under diverse market mechanisms and business models. The intricate interplay between these entities, particularly the potential of VPPs to assist BRPs in risk management, remains an underexplored facet of the energy landscape. A novel coordination framework is designed and proposed in this research to address such problem. Within this framework, BRPs allocate residual profiles to VPPs, thereby significantly mitigating their internal risks. The VPP, in turn, harnesses its capabilities to aggregate resources from multiple BRPs, enabling a strategic balance of uncertain energy outputs over a broader spectrum. Moreover, the VPP is strategically positioned to engage in multiple energy markets, effectively managing risk and optimizing interest arbitrage opportunities. The proposed coordination framework empowers both BRPs and VPPs to enhance their resilience in the face of uncertainty while simultaneously reaping greater risk-adjusted returns. By fostering collaboration and resource optimization, this paper advances the understanding of the dynamics between BRPs and VPPs, contributing to more robust, efficient, and sustainable new power system.