Research on the demand response trading strategy of virtual power plants under the two-stage game model

Virtual power plants face dual challenges in coordinating internal distributed resources and engaging in strategic external trading under market uncertainties. This study proposes a two-stage game-theoretic decision framework to address these challenges. In the first stage, distributionally robust optimization aggregates photovoltaic systems, energy storage, and flexible loads to construct an internal cost function that incorporates operational risks. In the second stage, this cost function is embedded within a Stackelberg game to model the VPP’s strategic interaction with the external market, where a deep reinforcement learning algorithm adaptively approximates the equilibrium bidding strategy. Simulation results based on real market data from a Chinese provincial spot market and an actual VPP demonstration project demonstrate the effectiveness of the proposed approach. Over a 28-day test period spanning diverse seasonal conditions, the method increases average daily net profit by 18.7% compared to single-stage optimization and by 12.3% compared to deterministic game models, while improving the 95% Value-at-Risk by 22.5%. The findings confirm that integrating distributionally robust optimization for risk-aware internal aggregation with deep reinforcement learning for adaptive external gaming effectively supports VPPs in achieving risk-aware profit maximization within complex market environments.

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Publication Details

Journal
Discover Applied Sciences
Published
2026-05-27
DOI
https://doi.org/10.1007/s42452-026-08842-4
Primary Topic
Smart Grid Energy Management
Type
article
Field-Weighted Citation Impact
0.00
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article

Research on the demand response trading strategy of virtual power plants under the two-stage game model

Jinxuan Li, Qi Yu, Lei Nie, Jianjun Lai et al.
Discover Applied Sciences
Smart Grid Energy Management
article

Research on the demand response trading strategy of virtual power plants under the two-stage game model

Jinxuan Li, Qi Yu, Lei Nie, Jianjun Lai, Yushi Ling, Ruibin Liang
article en

Abstract

Virtual power plants face dual challenges in coordinating internal distributed resources and engaging in strategic external trading under market uncertainties. This study proposes a two-stage game-theoretic decision framework to address these challenges. In the first stage, distributionally robust optimization aggregates photovoltaic systems, energy storage, and flexible loads to construct an internal cost function that incorporates operational risks. In the second stage, this cost function is embedded within a Stackelberg game to model the VPP’s strategic interaction with the external market, where a deep reinforcement learning algorithm adaptively approximates the equilibrium bidding strategy. Simulation results based on real market data from a Chinese provincial spot market and an actual VPP demonstration project demonstrate the effectiveness of the proposed approach. Over a 28-day test period spanning diverse seasonal conditions, the method increases average daily net profit by 18.7% compared to single-stage optimization and by 12.3% compared to deterministic game models, while improving the 95% Value-at-Risk by 22.5%. The findings confirm that integrating distributionally robust optimization for risk-aware internal aggregation with deep reinforcement learning for adaptive external gaming effectively supports VPPs in achieving risk-aware profit maximization within complex market environments.

Discover Applied Sciences
China Mobile (China) (CN), Guangzhou Automobile Group (China) (CN), China Southern Power Grid (China) (CN)
Affordable and clean energy
Openalex Percentile: Top 9%
Smart Grid Energy Management
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