Abstract
This article presents the concepts of the microgrid and the virtual power plant (VPP) as vehicles to facilitate cost-efficient integration of distributed energy resources (DERs) into the existing power system. These concepts were designed to enhance the system value and the controllability of DER and to provide frameworks for the development of interfaces among energy and ancillary service resources, system operators, and energy market participants. Through aggregation, DER access to energy markets is facilitated, and DER-based system support and ancillary services can be provided. By enabling this additional functionality, it is envisaged that system performance measured in the form of energy efficiency, power quality, security, and economic operation can be improved. In this paper, the technical and commercial functionality facilitated through the microgrid and VPP concepts is described. The paper concludes with case studies demonstrating the application of the concepts on a test system.
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