Remuneration assessment of a VPP providing distribution capacity services

A Distribution System Operator (DSO) might consider a capacity contract as a planning alternative to defer grid investments. A Virtual Power Plant (VPP) might be able to provide such capacity and change its production as requested by the DSO. This article presents an assessment of the impact of this type of distribution capacity contract (DCC) on VPP’s remuneration. This assessment is done by comparing the optimal production / bidding strategy which maximize its profit, under presence or absence of these contracts. The impact of intermittent generation and storage while evaluating these scenarios will be investigated as well. A stochastic unit commitment will be used to determine the VPP’s strategy under uncertainties from wind power, load, market prices, and the requested power by the DSO. The model showed that the VPP involvement in distribution capacity contracts can improve its remuneration when certain types of Distributed Energy Resources (DER) are used to provide the service.