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Title: A Market Feedback Framework for Improved Estimates of the Arbitrage Value of Energy Storage Using Price-Taker Models

Journal Article · · Applied Energy

Price-taker (PT) models are often used to assess the potential value or revenue of energy arbitrage opportunities for energy storage in wholesale markets. But as greater amounts of energy storage are deployed on the grid, current PT models fail to predict the effects that energy storage itself can have on market prices. This can lead to an overestimation of the economic value of storage and an inability to capture price suppression. In this paper, we propose the use of a modified PT model to simulate the impact of increased storage deployment on energy prices and the resulting impact on revenue. Our method uses a gradient-boosting regressor to estimate the impact on prices, and we apply our method on historical price data from the PJM and California Independent System Operator wholesale markets. We use this approach to explore possible causes of electricity price suppression that occur from storage capacity additions, which is generally not possible with PT models.

Research Organization:
National Renewable Energy Laboratory (NREL), Golden, CO (United States)
Sponsoring Organization:
USDOE Office of Energy Efficiency and Renewable Energy (EERE), Renewable Power Office. Solar Energy Technologies Office
DOE Contract Number:
Report Number(s):
NREL/JA-5D00-79184; MainId:33410; UUID:9c9f8002-66fc-41a6-b609-29d808df624a; MainAdminID:63855
Journal Information:
Applied Energy, Vol. 310
Country of Publication:
United States

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