  We focus on the aggregation of distributed energy resources (DERs) through a
profit-maximizing intermediary that enables participation of DERs in wholesale
electricity markets. Particularly, we study the market efficiency brought in by
the large-scale deployment of DERs and explore to what extent such benefits are
offset by the profit-maximizing nature of the aggregator. We deploy a
game-theoretic framework to study the strategic interactions between an
aggregator and DER owners. The proposed model takes into account the stochastic
nature of the DER supply. We explicitly characterize the equilibrium of the
game and provide illustrative examples to quantify the efficiency loss due to
the strategic incentives of the aggregator. Our numerical experiments
illustrate the impact of uncertainty and amount of DER integration on the
overall market efficiency.
