Simultaneous participation of demand response aggregators in ancillary services and demand response eXchange markets

Abstract

Participation of consumers in Demand Response (DR) programs improves system stability and reliability as well as market efficiency. Retailers and distributors purchase DR to advance business and system reliability, respectively. Meanwhile, large consumers, Distribution System Operators (DSOs), Load Service Entities (LSEs), and DR aggregators sell DR to increase their own profits. In this context, DR aggregators are key elements of power systems that enhance the participation of consumers in electricity markets. These market participants can negotiate their aggregated DR with other market players in Demand Response eXchange (DRX) markets, and participate in the energy and ancillary service markets. Hence, this paper proposes a stochastic model to optimize the performance of a DR aggregator to take part in the day-ahead energy, ancillary services and intraday DRX markets. In order to mitigate the negative impacts of uncertainties, Conditional Value at Risk (CVaR) is also incorporated to the proposed model. Numerical studies indicate that the proposed model for DR aggregator can arrange its offering/bidding strategies to participate in the mentioned markets simultaneously.