From Aggregation to Market: A Systemic Paradigm for Virtual Power Plants to Unlock Demand-Side Flexibility

The proliferation of large-scale distributed energy resources (DERs) at the demand side offers considerable regulation potential for enhancing the operational flexibility of power systems. However, the inherent dispersion, heterogeneity, and uncertainty of DERs pose significant challenges to their effective integration and utilization. Virtual Power Plants (VPPs) with advanced communication and computation technologies have emerged as a promising solution to aggregate and manage these geographically scattered resources. Yet existing research lacks a standardized paradigm to guide VPP operation in terms of resource aggregation, market participation, and operational dispatch. To bridge this gap, this paper proposes a systemic “aggregation evaluation-market bidding-command decomposition” paradigm for VPPs to unlock and harness demand-side flexibility. The paradigm begins with a comprehensive evaluation of the aggregate regulation capacity of DERs, followed by the development of an optimal bidding strategy for multi-market participation, and concludes with an efficient internal dispatch mechanism that decomposes market clearing instructions into executable setpoints for individual DERs. The proposed coordinated and scalable paradigm can facilitate the efficient integration of large-scale self-interest DERs and offer practical insights for the construction and operation of high-performance VPPs.