Mechanism Design for Virtual Power Plant with Independent Distributed Generators

Alfiya Kulmukhanova, Ali T. Al-Awami, Ibrahim M. El-Amin, Jeff S. Shamma

Research output: Chapter in Book/Report/Conference proceedingConference contribution

7 Scopus citations


Penetration of distributed energy resources (DERs) in the legacy grid is leading to lower wholesale electricity prices, higher balancing costs, and reliability issues. We study a virtual power plant (VPP) - an aggregation of DERs - as a feasible and non-disruptive way of integrating these resources into electricity markets. We design the VPP with a combination of dispatchable and non-dispatchable generators which are privately owned and might have private information. The VPP acts as an intermediary between the generators and the day-ahead wholesale market and balances the system locally in real time. Using mechanism design, we design heuristic transfers of the VPP to the generators to reduce the operating cost of the overall system. From the simulations, we conclude that the overall cost of the system and the behavior of the generators and the VPP with the designed transfers are similar to those of the centralized VPP case, where the VPP owns and manages the generators within its territory.
Original languageEnglish (US)
Title of host publicationIFAC-PapersOnLine
PublisherElsevier BV
Number of pages6
StatePublished - Sep 10 2019

Bibliographical note

KAUST Repository Item: Exported on 2021-03-29
Acknowledged KAUST grant number(s): KAUST003
Acknowledgements: The research reported in this publication was supported by funding from King Abdullah University of Science and Technology (KAUST) and by Deanship of Research at King Fahd University of Petroleum & Minerals under project no. KAUST003.


Dive into the research topics of 'Mechanism Design for Virtual Power Plant with Independent Distributed Generators'. Together they form a unique fingerprint.

Cite this