Modelling and assessing the impacts of self supply and market-revenue driven Virtual Power Plants

•A profound state-of-the-art on Virtual Power Plants (VPPs) is provided.•We determine the typical VPP composition and establish VPPs composed of small generators (wind, photovoltaic and combined heat and power plants) and flexible demands.•The most common objectives of VPP: maximisation of self supply and market-revenue are modelled.•We analyse the results from two different perspectives: from the point of view of the VPP and from the system operations perspective.•We determine the impact of a massive existence of VPPs for the electric system.

Distributed generation will make up for more than half of the installed electric generation capacity in 2020 in Spain. The major part of this generation is renewable-energy based and intermittent. This provokes important challenges in the operation of the electric energy system: The number of generators increases, the size of generators decreases and more variability as well as uncertainty will exist in the operation of the electric system. To ensure a viable operation, an option which bears a high potential is the aggregation of many small generators as well as demands into one entity: a so-called Virtual Power Plant (VPP). This article will treat the techno-economic impact of the massive integration of small generators and demands into VPPs both on the system functioning and on the outcome of demands and generators within these VPPs. We will analyse and compare several strategies of VPPs.