Optimal Operation Strategy for Integrated Natural Gas Generating Unit and Power-to-Gas Conversion Facilities

Abstract

A scenario-based stochastic decision-making model is proposed in this paper to determine the optimal strategy for the operation of integrated natural gas generating unit (NGG) and power-to-gas conversion (P2G) facilities in energy and regulation markets. Using the proposed strategy, the coordination of NGG and P2G facilities will provide a higher market payoff than that of independent NGG and P2G participation. The market price uncertainty is simulated in multiple scenarios using the Latin hypercube sampling method and the conditional value-at-risk strategy is adopted for evaluating the financial risks introduced by price uncertainties. The optimal bidding strategy is developed for both P2G and NGG operations and the Shapley-value method is employed to allocate the market payoff among NGG and P2G facilities. A case study which is based on the Pennsylvania, New Jersey, and Maryland market data is employed to verify the effectiveness of the proposed model and examine the characteristics of the proposed bidding strategy for the optimal operation of integrated NGG and P2G facilities.