Optimal strategies for virtual power plants to participate in medium- and long-term power trading in the context of contracts for difference (CFDs)

Abstract In the context of virtual power plants gradually joining the medium-and long-term power market transactions, the decision-making problem of this new subject in the transaction process has attracted wide attention. Since virtual power plants possess distributed power sources on the supply side, as well as variable loads, energy storage, and other resources on the customer side, they are able to participate in both the sale and purchase of electricity in the medium-and long-term electricity market at the same time, which leads to the need for the relevant analysis to be divided into the two cases of sale and purchase of electricity. At the same time, due to the wide application of the CFD mechanism, power transactions should also take into account the compensation adjustment brought by this mechanism in addition to the market price. To sum up, this paper constructs a static game model for the virtual power plant’s power sales and purchasing strategies in the medium-and long-term power market under the premise of the CFD mechanism. The analysis shows that the optimal trading volume is related to the CFD volume, the total volume of power supplied by the bidding, the market price, etc. The relevant conclusions will help market managers to grasp the market price. The conclusions of the analysis help market managers grasp the key transaction information and assist virtual power plants to participate in medium-and long-term power transactions in an orderly manner.