Time-Varying Import and Export Tariffs for Optimal Prosumers Integration

The growing adoption of distributed energy resources (DERs) has transformed passive consumers into active prosumers, necessitating advanced energy management strategies to fully leverage their flexibility. This paper proposes a bilevel optimization model capturing the interaction between system operators and prosumers, represented by Virtual Power Plants (VPPs). The upper level determines optimal time-varying tariffs, while the lower level models prosumer responses. Unlike existing studies, our approach implements separate import and export tariffs, reflecting real-world conditions and promoting efficient energy use. To address computational challenges posed by the non-convex lower-level problem, we employ a novel solution method based on decomposition and column-and-constraint generation (C&CG) algorithms. Preliminary results show promising improvements in the VPP flexibility utilization and overall system efficiency when tested on a simplified model of Australian National Electricity Market with significant penetration of renewable generation.