Influence of European Market Frameworks on Market Participation and Risk Management of Virtual Power Plants

Abstract

To increase economic efficiency of distributed energy resources, the political demand for stronger market integration has intensified across European market areas. In contrast to subsidy based, fixed feed-in tariffs, direct marketing is subject to market risks. These risks are caused by forecasting uncertainties of both intermittent generation and spot market prices. The specifics of different European markets can increase or reduce risks. Aggregating DER to a Virtual Power Plant (VPP) helps to comply with market requirements. Additionally, a systematic use of the available trading options by the VPP operator can be used as risk management. The complexity of market frameworks, trading options and generation technologies within a VPP, makes a detailed market scheduling necessary. Therefore, this paper proposes a stochastic scheduling process, which considers both the expected revenue and market risk in the optimization. The method is applied to various European markets and the influence on risks is evaluated.