A Pricing Mechanism for BESS in Frequency Regulation Considering Penetration of the Renewables

Abstract

With the increasing penetration of the renewables, power system is with the challenge of the frequency stability. Battery energy storage systems (BESS) are regarded as an effective way providing frequency regulation. At present, BESS mainly make profit by the energy arbitrage, and cannot get much by frequency regulation. Beside executive orders, economic stimulation is another more reasonable method to encourage BESS providing frequency regulation. Therefore, a pricing mechanism for BESS in frequency regulation (FR) considering the penetration level of the renewables is proposed in this paper. In detail, the proposed mechanism sets the minimum tracking accuracy of the BESS in frequency regulation according to the renewables penetration level, and decides the optimal regulation price of BESS which encourages BESS to achieve the setting tracking accuracy. The dynamic programming method is used to decide the way that BESS follow the frequency regulation signals. At last, the promising results shows the proposed pricing mechanism can stimulate BESS in frequency regulation, benefiting to the power system frequency stability.