IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v390y2025ics0306261925005033.html
   My bibliography  Save this article

Research on interaction between HEMS-VPP and power system with high renewable energy penetration under net zero emissions: Operation strategy and economy viability boundary

Author

Listed:
  • Zhou, Yuxuan
  • Wang, Lichao
  • Fan, Hongtao
  • Wang, Yu
  • Sun, Yaojie

Abstract

With rapid development of net-zero emissions, the penetration rate of variable renewable energy (VRE) rises continuously that leads to instability of power system, which is suggested to be resolved by home energy management system - virtual power plant (HEMS-VPP). However, operation strategy and economy viability of HEMS-VPP are generally not accurate enough since significant impact of the interaction between HEMS-VPP and power system under changing external market caused by dynamic coupling among VRE penetration, electricity prices volatility and HEMS-VPP operation. In this paper, an operation strategy based on soft link between HEMS-VPP model and national power system & electricity market model is proposed to enhance economy viability of HEMS-VPP under impact of changing external market conditions derived from power system transition, whose boundary is further determined to get feasible investment market conditions. A multi-agent game model on Bid/Offer in balancing mechanism is established to simulate equilibrium operation of HEMS-VPP in competitive two-stage electricity markets. An aggregation model considering behavior uncertainty of residential users is presented to analyze economic incentive mode of HEMS-VPP. A HEMS cell model for fine-grained scenario is established to reveal inner operational characteristics of HEMS-VPP. The proposed method is evaluated by UK power system case. The results show that proposed operation strategy can achieve equilibrium in competitive two-stage electricity markets, which makes net present value of HEMS-VPP profitable by reducing annual electricity costs of 41 %. The economy viability boundary of HEMS-VPP aggregator and residential users are accurately determined, by which investment “sweet spot” is suggested.

Suggested Citation

  • Zhou, Yuxuan & Wang, Lichao & Fan, Hongtao & Wang, Yu & Sun, Yaojie, 2025. "Research on interaction between HEMS-VPP and power system with high renewable energy penetration under net zero emissions: Operation strategy and economy viability boundary," Applied Energy, Elsevier, vol. 390(C).
    • Handle: RePEc:eee:appene:v:390:y:2025:i:c:s0306261925005033
    DOI: 10.1016/j.apenergy.2025.125773
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261925005033
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2025.125773?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Etedadi, Farshad & Kelouwani, Sousso & Agbossou, Kodjo & Henao, Nilson & Laurencelle, François, 2023. "Consensus and sharing based distributed coordination of home energy management systems with demand response enabled baseboard heaters," Applied Energy, Elsevier, vol. 336(C).
    2. Castagneto Gissey, Giorgio & Zakeri, Behnam & Dodds, Paul E. & Subkhankulova, Dina, 2021. "Evaluating consumer investments in distributed energy technologies," Energy Policy, Elsevier, vol. 149(C).
    3. Banshwar, Anuj & Sharma, Naveen Kumar & Sood, Yog Raj & Shrivastava, Rajnish, 2019. "Market-based participation of energy storage scheme to support renewable energy sources for the procurement of energy and spinning reserve," Renewable Energy, Elsevier, vol. 135(C), pages 326-344.
    4. Li, Li & Fan, Shuai & Xiao, Jucheng & Zhou, Huan & Shen, Yu & He, Guangyu, 2024. "Fair trading strategy in multi-energy systems considering design optimization and demand response based on consumer psychology," Energy, Elsevier, vol. 306(C).
    5. Edalati, Saeed & Ameri, Mehran & Iranmanesh, Masoud & Sadeghi, Zeinolabedin, 2017. "Solar photovoltaic power plants in five top oil-producing countries in Middle East: A case study in Iran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1271-1280.
    6. Wang, Han & Riaz, Shariq & Mancarella, Pierluigi, 2020. "Integrated techno-economic modeling, flexibility analysis, and business case assessment of an urban virtual power plant with multi-market co-optimization," Applied Energy, Elsevier, vol. 259(C).
    7. Talihati, Baligen & Tao, Shengyu & Fu, Shiyi & Zhang, Bowen & Fan, Hongtao & Li, Qifen & Lv, Xiaodong & Sun, Yaojie & Wang, Yu, 2024. "Energy storage sharing in residential communities with controllable loads for enhanced operational efficiency and profitability," Applied Energy, Elsevier, vol. 373(C).
    8. Zakeri, Behnam & Cross, Samuel & Dodds, Paul.E. & Gissey, Giorgio Castagneto, 2021. "Policy options for enhancing economic profitability of residential solar photovoltaic with battery energy storage," Applied Energy, Elsevier, vol. 290(C).
    9. Sun, Qingkai & Wang, Xiaojun & Liu, Zhao & Mirsaeidi, Sohrab & He, Jinghan & Pei, Wei, 2022. "Multi-agent energy management optimization for integrated energy systems under the energy and carbon co-trading market," Applied Energy, Elsevier, vol. 324(C).
    10. Peng, Xu & Tao, Xiaoma, 2018. "Cooperative game of electricity retailers in China's spot electricity market," Energy, Elsevier, vol. 145(C), pages 152-170.
    11. Dong, Lianxin & Wu, Qing & Hong, Juhua & Wang, Zhihua & Fan, Shuai & He, Guangyu, 2023. "An adaptive decentralized regulation strategy for the cluster with massive inverter air conditionings," Applied Energy, Elsevier, vol. 330(PA).
    12. Kallel, Randa & Boukettaya, Ghada & Krichen, Lotfi, 2015. "Demand side management of household appliances in stand-alone hybrid photovoltaic system," Renewable Energy, Elsevier, vol. 81(C), pages 123-135.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiang, Yuzheng & Dong, Jun & Huang, Hexiang, 2024. "Optimal bidding strategy for the price-maker virtual power plant in the day-ahead market based on multi-agent twin delayed deep deterministic policy gradient algorithm," Energy, Elsevier, vol. 306(C).
    2. Zakeri, Behnam & Gissey, Giorgio Castagneto & Dodds, Paul E. & Subkhankulova, Dina, 2021. "Centralized vs. distributed energy storage – Benefits for residential users," Energy, Elsevier, vol. 236(C).
    3. Kim, Yong Soon & Park, Gye Hyun & Kim, Seung Wan & Kim, Dam, 2024. "Incentive design for hybrid energy storage system investment to PV owners considering value of grid services," Applied Energy, Elsevier, vol. 373(C).
    4. Song, Meng & Gao, Ciwei & Ma, Sisi & Meng, Jing & Chen, Kang, 2022. "Distributed scheduling of HVACs based on transactive energy and ADMM," Applied Energy, Elsevier, vol. 325(C).
    5. Pratik Mochi & Kartik Pandya & Joao Soares & Zita Vale, 2023. "Optimizing Power Exchange Cost Considering Behavioral Intervention in Local Energy Community," Mathematics, MDPI, vol. 11(10), pages 1-15, May.
    6. Idiano D'Adamo & Alessandro Dell'Aguzzo & Marco Pruckner, 2024. "Residential photovoltaic and energy storage systems for sustainable development: An economic analysis applied to incentive mechanisms," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(1), pages 84-100, February.
    7. Gao, Evelyn & Sowlati, Taraneh & Akhtari, Shaghaygh, 2019. "Profit allocation in collaborative bioenergy and biofuel supply chains," Energy, Elsevier, vol. 188(C).
    8. Liu, Yang & Jiang, Zhigao & Guo, Bowei, 2022. "Assessing China’s provincial electricity spot market pilot operations: Lessons from Guangdong province," Energy Policy, Elsevier, vol. 164(C).
    9. Li, Yanbin & Hu, Weikun & Zhang, Feng & Li, Yun, 2025. "Multi-objective collaborative operation optimization of park-level integrated energy system clusters considering green power forecasting and trading," Energy, Elsevier, vol. 319(C).
    10. Fernando Echevarría Camarero & Ana Ogando-Martínez & Pablo Durán Gómez & Pablo Carrasco Ortega, 2022. "Profitability of Batteries in Photovoltaic Systems for Small Industrial Consumers in Spain under Current Regulatory Framework and Energy Prices," Energies, MDPI, vol. 16(1), pages 1-19, December.
    11. Kaiss, Mateus & Wan, Yihao & Gebbran, Daniel & Vila, Clodomiro Unsihuay & Dragičević, Tomislav, 2025. "Review on Virtual Power Plants/Virtual Aggregators: Concepts, applications, prospects and operation strategies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 211(C).
    12. Jun Dong & Yuanyuan Wang & Xihao Dou & Zhengpeng Chen & Yaoyu Zhang & Yao Liu, 2021. "Research on Decision Optimization Model of Microgrid Participating in Spot Market Transaction," Sustainability, MDPI, vol. 13(12), pages 1-26, June.
    13. Xie, Xuehua & Qian, Tong & Li, Weiwei & Tang, Wenhu & Xu, Zhao, 2024. "An individualized adaptive distributed approach for fast energy-carbon coordination in transactive multi-community integrated energy systems considering power transformer loading capacity," Applied Energy, Elsevier, vol. 375(C).
    14. Behnaz Behi & Ali Baniasadi & Ali Arefi & Arian Gorjy & Philip Jennings & Almantas Pivrikas, 2020. "Cost–Benefit Analysis of a Virtual Power Plant Including Solar PV, Flow Battery, Heat Pump, and Demand Management: A Western Australian Case Study," Energies, MDPI, vol. 13(10), pages 1-24, May.
    15. Yanbin Li & Feng Zhang & Yun Li & Bingkang Li & Zhen Li, 2019. "Evaluating the Power Grid Investment Behavior in China: From the Perspective of Government Supervision," Energies, MDPI, vol. 12(21), pages 1-23, November.
    16. Bo Sun & Siyuan Cheng & Jingdong Xie & Xin Sun, 2022. "Identification of Generators’ Economic Withholding Behavior Based on a SCAD-Logit Model in Electricity Spot Market," Energies, MDPI, vol. 15(11), pages 1-23, June.
    17. Lu, Qing & Lü, Shuaikang & Leng, Yajun, 2019. "A Nash-Stackelberg game approach in regional energy market considering users’ integrated demand response," Energy, Elsevier, vol. 175(C), pages 456-470.
    18. Lechl, Michael & Fürmann, Tim & de Meer, Hermann & Weidlich, Anke, 2023. "A review of models for energy system flexibility requirements and potentials using the new FLEXBLOX taxonomy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 184(C).
    19. Lin Cheng & Yuling Li & Shiyou Yang, 2024. "Distributed Cooperative Optimal Operation of Multiple Virtual Power Plants Based on Multi-Stage Robust Optimization," Sustainability, MDPI, vol. 16(13), pages 1-24, June.
    20. Peng, Feixiang & Hu, Shubo & Fan, Xuanxuan & Sun, Hui & Zhou, Wei & Guo, Furan & Song, Wenzhuo, 2021. "Sequential coalition formation for wind-thermal combined bidding," Energy, Elsevier, vol. 236(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:390:y:2025:i:c:s0306261925005033. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.