Abstract
Energy storage systems (ESS) are expected to provide additional flexibility to managed variable power flows in future power systems. It is believed that the business case for ESS as an alternative to traditional network reinforcements can be improved, if the assets are able to access additional revenue streams by participating in energy and ancillary services markets. To enable this, the storage may need to be operated by private merchants to circumvent the unbundling principle applied in electricity markets today. However, it is not clear if the right incentives are in place for these entities to operate the ESS in a way that provides the required flexibility and supports the wider system benefits sought by the system operator (SO). This work seeks to evaluate the impact of strategic behavior of an independent trader operating ESS in a nodal electricity market. The results indicated that a strategic bidder operating ESS tends to underuse the assets leading to suboptimal solution in terms of market welfare, as well as congestion and curtailment reduction, removing some of the potential benefits the ESS can provide to the power system.
Highlights
T HE continuing growth in Renewable Energy Sources (RES) as well as electrification of transport and heating introduces new challenges to electrical power system operation and balancing
The unbundling principle applied in most electricity markets today prohibits Network Operators (NO) owned Energy Storage Systems (ESS) to participate in electricity markets to access additional revenue streams during times it is not required for constraint management [1]
This may lead to underutilization of the assets and creates a case for privately owned storage that would be able to participate in ancillary services, energy markets, and sign contracts with the NO for any additional services it may provide [2]
Summary
Cost of energy block b of producers i Cost of energy block b of strategic producer j. Manuscript received April 22, 2015; revised August 10, 2015 and October 10, 2015; accepted October 30, 2015. Date of publication December 17, 2015; date of current version March 18, 2016. Color versions of one or more of the figures in this paper are available online at http://ieeexplore.ieee.org
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have