Advances in Virtual Power Plant Operations: A Review of Optimization Models

Fatemeh Marzbani , Ahmed Osman , Mohamed S. Hassan ·

YOU? · · 2025 · Open Access · · DOI: https://doi.org/10.1109/access.2025.3591697

In recent decades, the global shift toward sustainable energy solutions has accelerated, prompting nations to integrate renewable energy sources (RES) into their electricity grids and adhere to international environmental protocols. This transition has catalyzed the evolution from traditional power systems to smart grids, which form the backbone of contemporary energy management systems. However, smart grids often show limited adaptability to the large-scale integration of RES, underscoring a critical need for more dynamic solutions. Against this backdrop, Virtual Power Plants (VPPs) have emerged as a pivotal innovation, enhancing grid management through their robust handling of RES fluctuations and sophisticated distributed control systems. VPPs not only increase the flexibility, reliability, scalability, and performance of power systems but also improve asset utilization, bolster system resilience, and foster more effective market interactions. This surge in VPP deployment has sparked extensive research focused on optimizing VPP operations and their engagement with electricity markets. Given the rapid advancements in VPP technology and market integration, this review is critical for consolidating existing knowledge, guiding effective implementation strategies, and identifying emerging trends and challenges within the field. This review presents a comprehensive overview of prior research on VPP optimization, delineating the key methodologies and outcomes that have shaped current practices. Specifically, this paper discusses the fundamental concepts of VPPs, provides an overview of their integration into electricity markets, and examines the various optimization formulations and methodologies that have been proposed in the literature for enhancing VPP operational efficiency.