Dispatch optimization and economic evaluation of distributed generation in a virtual power plant

The future share of distributed generation units is likely to increase due to political requests as well as to politically driven subsidies in European and international energy supply systems. This increase implies a rising impact of the distributed generation units as well as of distributed storages and concepts of load management for supply companies. Most of the units are currently subsidized by governmental feed-in tariffs. As these subsidies are retrogressive, the necessity of evaluating small generators as part of the supply system arises. One option of market participation for dispersed generation is the aggregation in terms of a “virtual power plant”, thus representing one single generation or demand unit for the market. In this paper, different distributed generation, storage and load management options are presented and an optimization method for simulating a virtual power plant in different markets for electrical energy is introduced in order to demonstrate the benefits of such a concept. The optimization method is then applied to an exemplary scenario of a local utility company by aggregating the existing distributed units in one virtual power plant.