Development of Optimal Bidding Strategy for Virtual Power Plants in Energy and Frequency Regulation Markets Considering Uncertain Flexibility

There is an urgent need for incentivizing virtual power plant (VPP) to bid in frequency regulation market for enhancing the utilization level of renewable power. This paper proposes a new bidding model of VPP in energy and frequency regulation markets. The uncertain relation of VPP flexibility and bidding strategy is characterized by chance constraint. Furthermore, a new method to analyze the impact of uncertain flexibility on bid size in energy and frequency regulation markets is proposed. Through case studies, it is identified that allowing capacity bid to be larger than the flexibility level with a probability, can noticeably increase VPP’s revenue from providing frequency regulation service, thereby incentivizing VPP to enhance the portion of capacity bids in the frequency regulation market.