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This paper addresses the bidding problem faced by a virtual power plant (VPP) in a joint market of energy and spinning reserve service. The proposed bidding strategy is a non-equilibrium model based on the deterministic price-based unit commitment (PBUC) which takes the supply-demand balancing constraint and security constraints of VPP itself into account. The presented model creates a single operating profile from a composite of the parameters characterizing each distributed energy resources (DER), which is a component of VPP, and incorporates network constraints into its description of the capabilities of the portfolio. The presented model is a nonlinear mixed-integer programming with inter-temporal constraints and solved by genetic algorithm (GA). [ABSTRACT FROM PUBLISHER]

• Automatic Frequency Restoration Reserve market description. • Operating strategy for a generation pool comprising a Battery Energy Storage Systems (BESS) • Bidding strategy to derive optimal bids and to evaluate economic feasibility. • BESS market participation not economic feasible in 2019 but possibly in 2025. In continental Europe, automatic Frequency Restoration Reserve (aFRR) is one of three control reserve services to counteract imbalances in the electrical grid. The market is dominated by a few operators of conventional power plants since the auction design is complex and new players face various entrance barriers. In order to stabilize the electrical grid in the future, renewable generation technologies need to enter the market. To encourage operators (and traders) of renewable generation facilities to enter the market, this paper presents a bidding strategy based on an optimization approach for deriving an optimal bid and for estimating the revenue potential on this market. The focus is on the participation of Battery Energy Storage Systems (BESS) either in standalone mode or in conjunction with a virtual power plant (VPP). An in-depth cost breakdown and battery ageing model support the derivation of earning potentials. With current costs of containerized BESS, an operation is not economically viable. However, with a predicted cost breakdown for the year 2025 and a pooled operation, profits can be generated. But even for the reduced-cost scenario, profits were found to be lower than on the Frequency Control Reserve (FCR) market. [ABSTRACT FROM AUTHOR]