A Bilevel Programming Approach for Modeling Energy Transaction of Demand Response Aggregators in Smart Distribution Systems

Virtual power plants (VPPs) are interested in performing demand response programs as an important electricity source to supply the related loads. However, aggregating demand response (DR) provided by individual consumers will be difficult matter. So, individual responsive consumers are Aggregated by demand response Provider (DRP). In other words, The DRP aggregates DR programs by playing a mediator role between individual consumers and VPP. This paper presents different scheduling approaches to model DR programs in the VPP, namely: Single level programing approach (SLPA) and Bi-level programing approach (BLPA). In SLPA, VPP imports electricity from electricity market and also aggregates DR provided by individual consumers to supply its total loads. However, fair transaction between VPP and DRP is implemented through BLPA. In BLPA, DRP aggregates individual consumers and negotiates with the VPP to find out optimal contract price for executing DR programs. On the one hand, the DRP maximizes its provided profit by offering aggregated DR of the responsive consumers to VPP and on the other hand, the VPP aims to optimize its costs to procure demand of consumers. The proposed BLPA is transferred into a single level optimizing problem implementing its Karush-Kuhn-Tucker (KKT) optimality conditions. Finally, The efficiency of the presented model is verified through the case studies and analysis of the obtained results.