A Bi-Level Multi-Objective Model for Strategic Offering of Virtual Power Plant in Day-ahead Market

The accumulation of a large number of production units with small capacities and transforming them into a larger entity will make them visible in electricity market and increase their economic efficiency. Virtual power plant is a Wide energy management system that incorporates interruptible loads, storage and distributed generation in order to create support services of system and restoring energy. The main objective of this paper is to provide a method for optimizing virtual power plant bid along with other competitors in a day-ahead market. To achieve this goal a bi-level mathematical optimization model is presented in which equilibrium constraints are also taken into account. The first level of this model maximizes profit of virtual power plant and the second level maximizes social welfare problem. Bi-level model with the use of the theory of duality and optimality conditions of Karush-Kuhn-Tucker converts to a linear programming model of mixed-integer. This two level problem is also solved in a two-objective method using Epsilon constraint in order to maximize profits and minimize emission of units in virtual power plants. Finally, using fuzzy decision making the best answer is chosen and profit in two-objective mode is 41429.7d and pollution is 1969.9 pound, which compare with single-objective mode is more reasonable number. Proposed model is tested on IEEE 24-bus system and the results show the effectiveness of proposed method.