Risk-averse Demand Response Scheme for Real-time Dispatch of a Virtual Power Plant

A risk-averse demand response (DR) scheme is proposed for virtual power plant (VPP). The energy consumers are encouraged by the DR procedure to reduce energy consumption and then obtains incentive rates offered by VPP, through which VPP’s critical load are alleviated and its operational cost is reduced. The optimal model simulates the energy transactions between VPP operator and participants in the internal market, aiming at minimizing VPP’s operational cost and protecting consumer interests. Accounting for electricity price uncertainties, this model designs a multistage stochastic programming model. Considering the stochastic nature of uncertain prices, nonanticipativity constraints are utilized, ensuring decisions at every stage are entirely dependent on uncertainties realized up to that point, rather than on future information. Over a rolling-window horizon with K intervals, the proposed scheme generates sequential decisions as uncertainties are revealed, rather than making decisions simultaneously. In addition, risk management, through incorporating Conditional-Value-at-Risk (CVaR) index, is integral to developing optimal market strategies for a risk-averse VPP.