Participation of Pumped Hydro Storage in Energy and Performance-Based Regulation Markets

Abstract

This paper examines the non-strategic and strategic participation of a pumped hydro energy storage (PHES) facility in day-ahead energy and performance-based regulation (PBR), which includes regulation capacity and mileage markets. The PHES is modeled with the capability of operating in hydraulic short-circuit (HSC) mode with detailed representation of its operational constraints, and integrated with an energy-cum-PBR market clearing model. For its strategic participation, a bi-level market framework is proposed to determine the optimal offers and bids of the PHES that maximize its profit. The operation of PHES is modeled at the upper level, while the market clearing is modeled in the lower level problem. The bi-level problem is formulated as a mathematical program with equilibrium constraints (MPEC) model, which is linearized and solved as a mixed integer linear programming problem. Several case studies are carried out to demonstrate the impact of PHES’ non-strategic and strategic operations on market outcomes. Furthermore, stochastic case studies are conducted to determine the PHES strategies considering the uncertainty of the net demand and rivals’ price and quantity offers.