Capacity withholding assessment of power systems considering coordinated strategies of virtual power plants and generation companies

This paper presents a multi-level optimization framework for power system operators' joint electricity markets capacity-withholding assessment. The main contribution of this research is that three capacity-withholding indices are introduced for day-ahead, intra-day, and real-time scheduling of the system that detect the capacity withholding and arbitrage opportunities of Virtual Power Plants (VPPs) and non-utility fossil-fueled GENeration COmpanies (GENCOs) in an ex-ante procedure. A three-level optimization process is used so that the system operator can estimate the coordinated bidding of VPPs/GENCOs in different energy and ancillary services markets to prevent the formation of withholding groups. The first level problem consists of two stages. The first stage estimates the optimal capacity withholding and arbitrage bidding strategy of VPPs/GENCOs, and the second stage determines the optimal system scheduling for the day-ahead horizon. A full competition algorithm is also carried out to evaluate the competition states of VPPs/GENCOs. The second and third level problems consist of two optimization stages for the intra-day and real-time optimization horizons. At the first stage of each level, the process estimates the coordinated bidding of VPPs/GENCOs, and at the second stage of each level, the system resources are optimally dispatched. The proposed method is applied to 30-bus and 118-bus IEEE test systems. The proposed algorithm reduced the maximum locational marginal prices of 30-bus and 118-bus test systems by about 57.04% and 44.73% compared to the normal and the worst-case contingency operating conditions, respectively. Furthermore, the proposed method reduced the average values of day-ahead, intra-day and real-time dynamic capacity withholding indices of the 118-bus test system by about 32.92%, 40.1%, and 46.85%, respectively.