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Strategic Operation of a Virtual Energy Hub with the Provision of Advanced Ancillary Services in Industrial Parks

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Abstract

Coordinated operation of several industrial energy hubs (IEHs) to realize local energy management concepts at strategic points like industrial parks has attracted the attention of power grid operators worldwide. Deriving an operational model for integrating a large set of IEHs to trade energy in various markets is a fundamental challenge that has not yet been addressed. In this context, this paper presents an optimal market participation strategy for a virtual energy hub (VEH) consisting of multiple IEHs and industrial consumers. The proposed strategy seeks to answer two questions: (1) how can a VEH operator (VEHO) minimize its operation cost when participating in different energy markets (2) how can ancillary services affect the economic performance of VEH To address these questions, a two-stage robust-stochastic optimization model is proposed with the aim of minimizing the total operation cost of VEH and compensating the operational risks associated with the existing uncertainties considering the operational limits of the power grid. To this aim, the advanced ancillary services, i.e., market-based demand response programs and transactive energy management mechanism are used in line with the optimization problem. Furthermore, the role of the multi-supply facilities is included in the developed strategy to improve VEH flexibility.