Abstract
Energy storage can provide multiple auxiliary services such as inertia support and frequency response, which has become the key to ensure the low-carbon and safe operation of the new power system. However, it remains an open question as how the storage operated by private merchants will be scheduled and whether this profit-seeking behavior can lead to the loss of system efficiency. This paper seeks to evaluate the impact of storage ownership on the market electricity price, welfare transfer and market behavior. A bi-level model is for-mulated to capture the interaction between the storage ownership and its market behavior. The results indicated that the general arbitrage be-havior of energy storage can contribute to peak shaving. However, when considering the joint participation of energy storage and different types of generating units such as renewable units or conventional units, its strategic behavior will lead to the transfer of social welfare as well as the system efficiency losses.
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