Proceedings of the PowerUp Conference

Current Flexible Ramping Product (FRP) procure- ment relies heavily on gas-fired generators, which incur signifi- cant inefficiencies due to the “over-commitment” problem caused by minimum generation constraints. While HVAC-based Virtual Batteries (VBs) offer a flexible alternative, their large-scale aggregation transforms them from price-takers to price-makers, creating a unique financial risk: the HVAC load increasing phase may coincide with self-induced price spikes, eroding ramping revenues. To address this, this paper proposes a two-stage stochastic market clearing framework that co-optimizes energy and ramping services. We explicitly model the distinct “Up- Down” and “Down-Up” load shifting of VBs to provide ramping capacities. Crucially, a financial risk management mechanism is integrated into the optimization to hedge against the price volatility caused by the VBs’ own load-shifting behavior. Nu- merical results demonstrate that the proposed method effectively mitigates the rigid commitment of gas units and ensures the economic viability of VB participation by shielding them from adverse price impacts.