Integrated techno-economic modeling, flexibility analysis, and business case assessment of an urban virtual power plant with multi-market co-optimization

The concept of Virtual Power Plant (VPP) is recognized as an effective option to aggregate and operate Distributed Energy Resources (DER) to participate in wholesale energy markets and provide flexibility and associated grid services that are needed in a renewable-rich energy system. Also, as most of the DER are available in urban areas, there are increasing interests in assessing the potential to develop urban VPP, for example in university campuses. However, exploiting the flexibility of VPP and developing robust business cases require advanced considerations on their technical and commercial constraints and trade-offs in deploying the VPP's flexibility when simultaneously participating in multiple markets. In this context, this paper presents a comprehensive, integrated techno-economic modeling approach that assesses the technical and commercial flexibility opportunities and develops a relevant business case framework based on co-optimized participation in multiple markets for an urban VPP. A real-world case study based on the University of Melbourne's new campus under development is used to demonstrate the proposed approach, including the VPP's participation in the energy, frequency control ancillary services, demand response, and hedging contract markets. The technical analysis shows that diversity of DER portfolio results in improved participation of VPP in various markets. From an economic perspective, a multi-market co-optimization model such as the one proposed here, fully exploiting the DER's aggregated flexibility, results in attractive business cases for operating DER in urban areas as a VPP. The proposed approach and examples provided may be seen as a blueprint for more VPP applications and unlocking the great flexibility available in urban areas.