Equilibrium decisions of electricity and ancillary services for energy storage in a renewable power system

Abstract

Mitigating the power supply fluctuations and maintaining profitability is essential for the operation of the renewable power system (RPS). This study examines, from a supply chain perspective, how the decisions of generators with energy storage technologies (ESTs) in the electricity market (EM) and ancillary services market (ASM) will affect the volatility and profitability of the RPS. The supply chain network equilibrium approach is adopted to investigate the optimal transaction prices and volumes among various decision-makers in the network with the objectives of maximizing profits. The equilibrium conditions are presented with the variational inequality theory and a modified projection algorithm. A case study based on a real situation is carried out and the results show that: (1) When ESTs are used in the EM only, it works well on smoothing the fluctuations of electricity output and price. (2) ESTs, when used in the ASM, can significantly improve the profitability of both the generator and the RPS. (3) When ESTs are used in both the EM and ASM, ancillary services account for approximately 84 % of storage capacity. In addition, ESTs can also promote the consumption of renewable power. This study provides valuable insights for informed decisions to enhance the economic and stable operation of the RPS.