  We consider the aggregation of distributed energy resources (DERs) by a
profit-seeking DER aggregator (DERA), participating directly in the wholesale
electricity market and constrained by the distribution network access. We
propose a competitive DER aggregation that maximizes the DERA's profit subject
to that each customer of the DERA gains no less surplus and pays no higher
energy cost than that under the regulated retail tariff. The DERA participates
in the wholesale electricity market as virtual storage with optimized
generation offers and consumption bids derived from the DERA's competitive
aggregation. Also derived are DERA's bid curves for the distribution network
access and DERA's profitability when competing with the regulated retail
tariff. We show that, with the same distribution network access, the proposed
DERA's wholesale market participation achieves the same welfare-maximizing
outcome as when its customers participate directly in the wholesale market. We
empirically evaluate how many DERAs can survive in the long-run equilibrium.
Numerical studies also compare the proposed DERA with existing benchmarks on
surpluses of DERA's customers and DERA profits as functions of the DER adoption
level and the distribution network access.
