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Pamela was supervised by Professor Geert Decononinck, head of the Electrical Energy and Computer Architectures department at KU Leuven, and Professor George B. Huitema, senior scientist at MCS department in TNO and Professor in the Faculty of Economics and Business at the University of Groningen.
With the transition of energy supply from controllable fossil fuel based generators to more sustainable options, aggregators are developing to be one of the new stakeholders to inject more flexibility in the new energy sector. An aggregator brings together residential, commercial and small industrial demand response (DR) and distributed generation, as a Virtual Power Plant (VPP), to actively participate in electricity markets and enter demand response programs offered by the operators of the energy system.
Two main barriers for these aggregator services have been identified: Knowledge of VPP characteristics and determining the value of aggregator services. This research presents a model estimate of the characteristics of a VPP, namely flexible capacity, and was developed using only top level aggregated information thereby maintaining end customer’s privacy while performing with a high accuracy. Further, a mathematical set-up to determine the value of a VPP’s flexible capacity on the wholesale energy markets was defined.
Using this formulation, a methodology to assess internal VPP as well as external influences, such as market design and environmental factors, on the potential value is presented. This methodology can be used to recommend which smart grid services an aggregator should offer and confirm a business case for a new aggregator. Also the assessment can be applied to evaluate the performance and recommend improvements to demand response control and trade strategies.