Study on Challenges and Risks of Scaled Virtual Power Plant Competition on Grid Security Operation

In power systems with multiple virtual power plants (VPPs) connected to the same node, decentralized self-interested optimization by individual VPPs considering only their own load demand and grid capacity constraints often leads to suboptimal results for the entire system. While such uncoordinated dispatch may maximize individual benefits, it causes a deviation between the Nash equilibrium and the social optimum, reduces overall market welfare, and may lead to grid congestion, increased peak-to-valley differentials, and operational risks. This challenge is exacerbated by the high penetration integration of renewable energy sources and complex market dynamics. To address this issue, we propose a fairness-guided Nash bargaining model that coordinates VPP dispatch by integrating bargaining power and physical constraints. The model balances individual economic goals and system-wide efficiency by weighting fairness coefficients that take into account VPP load characteristics, grid capacity constraints, and bargaining power. By reconciling individual and collective rationalities, our approach not only improves total societal welfare, but also improves grid stability and renewable energy utilization. This research contributes to more secure, equitable, and cost-effective power system management in the era of energy transition.