Electricity Pricing in the Context of Virtual Power Plants

In the background of large-scale penetration of distributed energy resources, efficient energy integration approach has become more and more critical. This paper studies an integrated management method called virtual power plant (VPP), which can integrate dispersed distributed energy through aggregators, and operate through a central controller. Then, established a VPP model with PV-battery system, power storage constraints, power balance constraints, power transfer limits to study the change of power generation and power flow and propose an electricity tariff scheme by calculating the local marginal price (LMP) which obtained by computing the Lagrange multipliers for different constraints. In this way, real-time electricity price updates can be controlled and send to users at each corresponding time slot. This paper also simulates this process and analyzes the result, the average marginal price that users with different property need to pay under VPP is compared, and the impact of changing marginal resources on the results is also discussed. The results show that VPP effectively reduces the marginal cost of the power plant, and all participants will get benefits, which reflecting the maximization of social benefits.