Design of Bidding Mechanism for Prosumers to Participate in Ancillary Service Market Based on Mechanism Design Theory

With the rapid development of distributed photovoltaic, electric vehicles, energy storage and other technologies, the group of prosumers with dual functions of power production and consumption is growing. Prosumers have high responsiveness, flexible operation characteristics, and huge development potential. However, individual resources are limited and very scattered, and cannot directly participate in the power auxiliary service market. Therefore, virtual power plants are introduced to effectively aggregate and manage the resources of prosumers. Based on the theory of economic mechanism design, a bidding mechanism for prosumers to participate in the auxiliary service market has been established. This mechanism has the characteristics of incentive compatibility, which can effectively encourage Virtual power plants to report true costs, save electricity costs, and achieve effective resource allocation. The rationality and effectiveness of the proposed mechanism are verified through the analysis of a calculation example.