Prosumer Participation in Day-Ahead Electricity Markets Through Aggregators: A Stochastic Model for Uncertainty

This paper presents a mathematical formulation of the interaction between the wholesale market and aggregators within a modern power system. The problem is formulated as a bilevel program. The upper level is a unit commitment problem to emulate the wholesale electricity market outcome. The lower level, a scenario-based problem considering solar radiation uncertainty, minimizes the energy purchased by the aggregator in the electricity market. The coupling between the two levels is done through the locational marginal price considering the effect of transmission losses. Transmission losses are modeled as a quadratic expression in terms of real power flows. The formulations are validated and compared in the 5-bus PJM system. Results show that during congestion periods, higher locational marginal prices were observed, while cases with optimized PV integration and storage led to LMP reductions and peak demand decreases of up to 4.19%, highlighting the role of aggregators in enhancing system flexibility and reliability.