Virtual power plant models and market participation: A deep dive into optimization and real-world applications

• Evaluating VPP Models for Operational Profitability and Reliability Across Markets. • Comprehensive Analysis and Comparison of Mathematical Formulations and Solution Methods in VPP Models. • Challenges in Integrating Distributed Energy Resources into Energy Markets. • Categorizing and Analyzing VPP Interactions with Energy Markets. • Real-World Applications of VPP Models. In recent years, the integration of distributed generation into power networks has led to the development of advanced operational strategies that aim to optimize energy distribution and consumption. Consequently, enhancing the management of decentralized electricity generation through different Virtual Power Plant (VPP) configurations has gained significant attention. Equally important is leveraging their capability to participate in energy markets efficiently, ensuring economic viability and maximizing financial returns. This study focuses on systematically reviewing and classifying recent research on VPP models, particularly in terms of their market interactions and interactions with other entities. The classification framework considers key aspects, including model formulation, computational methodologies for addressing mathematical complexities, market participation strategies, and the practical feasibility of these models. The results indicate that modern VPP frameworks are becoming increasingly sophisticated, integrating broader market engagement and enhancing their adaptability to diverse energy policies. By analyzing these developments, this research aims to identify the most effective VPP structures under varying regulatory conditions, while also addressing the existing gaps and challenges that require further exploration.