An Incentive-Compatible VPP Profit Allocation Model Considering the Operating Characteristics of Air Conditioning Loads

The output fluctuation of renewable energies poses challenges to the power system and can reduce the profits of the energy resources in power markets with imbalance settlement. Virtual power plants (VPPs) can aggregate renewable energies to smooth the overall output fluctuations, thereby enhancing their market profits. In addition, incorporating air conditioning loads, whose energy-consuming flexibility brought by the thermal inertia of buildings is considerable, can further enhance the energy management capabilities and market profits of the VPP. To achieve this, a profit allocation model that considers the operational characteristics of air conditioning is needed, which has been seldom studied in the existing literature. This paper proposes a novel profit allocation method inspired by the bargaining game theory, which takes into account the characteristics and contributions of air conditioning to the VPP’s profit. Simulation results validate that our method is not only incentive-compatible but also properly considers the contributions of each member within the VPP.