EV-observing distribution system management considering strategic VPPs and active & reactive power markets

The growing deployment of new flexible resources, renewable energy resources (RES), and Electric Vehicles (EV) in the distribution system necessitates new methods to manage the distribution system operation optimally. In this regard, our paper, by deploying the concept of Virtual Power Plants (VPPs) as the aggregation of multiple agents and local power markets that are known as important tools for future power systems presents a management framework for the distribution systems with high penetration of EVs. To this end, the interaction of the DSO and VPPs is studied based on their strategic behaviour through the local active and reactive power markets. This way, a bilevel optimization approach is proposed where the DSO aims to minimize its operational cost by setting the operation point of its own facilities and determining the hourly active and reactive power prices for VPPs considering the distribution system congestion in the upper level. At the lower level, VPPs try to minimize their cost by scheduling their assets based on the local active and reactive power prices set by the DSO. The results show how nodal pricing in local markets could improve the distribution system operation. In addition, it is indicated that Reactive Power Support (RPS) from VPP-owned EVPLs can decrease the VPPs’ cost by gaining profit in the reactive power market and facilitating their participation in the active power market.