Bi-Level Clustering Model to Maximize the Profits of Demand Response Aggregators in Electricity Markets

With the high penetrations of renewable energies, demand response technology is widely implemented to ensure the balance between supply and demand and improve the utilization efficiency of energy resources. Demand response aggregators play an important role in implementing the technology for it integrates the scattered demand response resources to participate in the electricity markets and regulation markets. However, the economic benefits of demand response aggregators are rarely considered in the existing studies. To address this issue, this paper presents a bi-level clustering model to cluster demand response resources with the goal of maximizing the aggregators’ profits. The bi-level clustering model combines 1) the inner market-clearing model to determine the electricity prices and total aggregators’ profits under certain clustering results and 2) the outer k-means clustering model to get the optimal clustering results. The effectiveness of the proposed bi-level clustering model is verified in an IEEE 30-bus test system.