Going, Going, Gone: Optimising the bidding strategy for an energy storage aggregator and its value in supporting community energy storage

Abstract

Energy storage aggregation can bring many advantages to electrical power systems; these include improving flexibility, lowering system costs and reducing the need for carbon-intensive peaking plants. In this work linear and quadratic optimisation models are applied to examine the value derived by an aggregator, using energy storage for arbitrage in Great Britain’s day-ahead and balancing energy markets. The optimum arbitrage strategy is determined when the aggregator is considered a price-taker and a price-maker with access of up to 500 MW battery storage. In the day-ahead market the choice of price-taker or price-maker strategy made negligible difference, however, in the balancing market the price-maker profits were 10.9% higher for 500 MW storage when prices were perfectly forecasted. For imperfect forecasting, the choice of strategy made a negligible difference. A sensitivity analysis challenged the modelling assumptions. System parameters that had the greatest impact on results were the battery efficiency (more efficient, higher profits) and its duration (shorter duration, higher profits). The model was then applied to investigate the potential value that can be obtained by an aggregator with partial access to a community-owned energy storage. Results showed that household electricity bills could be improved by this arrangement. In particular, households that use their batteries less during the winter months, could improve their profits by up to 13.2% if aggregator access is allowed.