Studies in VPP concept are conducted mainly in three

Studies in VPP concept are conducted mainly in three major directions:First direction involves classification of DGs inside the VPP structure according to their capacity and ownership. Two categories were considered; Domestic DG (DDG) and Public DG (PDG). Another DG classification was obtained with respect to their operational nature; either stochastic or dispatchable.Second direction is concerned with the technical and commercial VPP structure; Technical VPP (TVPP) and Commercial VPP (CVPP), and their functionalities.Third direction is focused on  operation optimization of VPP. There are studies that describes VPP structure optimization by selecting the optimal size and location of the VPP components. Also other studies which highlights the profit maximization of the VPP13.Since renewable sources, such as wind and solar power plants, suffer from their stochastic nature, their behavior on market is very delicate. First, to diversify the risk of not meeting the long-term electricity delivery contracts, and secondly to achieve better results on the electricity market. The virtual power plant is consisted of several renewable energy sources and at least one conventional power plant. The production of renewable energy sources cannot be perfectly forecasted, and in order to create a stable market agent, a conventional power plant is used to produce the electricity when necessary. Therefore, an optimal dispatch schedule within the virtual power plant is needed.The problem is formulated as a mixed-integer linear programming model which incorporates long-term bilateral contracts with weekly forecasted hourly market prices. The aim of the optimization is to maximize the profit of the virtual power plant5,6. To same problem was analysed using an Accelerated particle swarm optimization.The experimental results show that the proposed optimization method provides high quality solutions while meeting constraints7.This paper designs the mechanism of virtual power plant in the future Smart Grid. The model formulations of the mechanism are presented and the MS-VND algorithm is used to optimize the objects of the model. The result of simulations shows that both the operating costs and the active power losses can be reduced by rationally planning of VPP. A satisfactory solution can be found between the objects of businesses benefits and system management using the proposed model and algorithm1.2015