Beyond Price-Taker: Multiscale Optimization of Wind and Battery Integrated Energy Systems

Journal Article · Fri May 02 00:00:00 EDT 2025 · IEEE Transactions on Energy Markets, Policy and Regulation

DOI:https://doi.org/10.1109/TEMPR.2025.3564533· OSTI ID:2568253

Chen, Xinhe ^[1]; Gao, Xian ^[2]; Guittet, Darice ^[3]; Tumbalam-Gooty, Radhakrishna ^[4]; Knueven, Bernard ^[3]; Siirola, John D. ^[5]; Miller, David C. ^[6]; Dowling, Alexander W. ^[1]

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1. University of Notre Dame, IN (United States)
2. University of Notre Dame, IN (United States); Grubhub Holdings Inc., Chicago, IL (United States)
3. National Renewable Energy Laboratory (NREL), Golden, CO (United States)
4. NETL Support Contractor, Pittsburgh, PA (United States)
5. Sandia National Laboratories (SNL-CA), Livermore, CA (United States)
6. National Energy Technology Laboratory (NETL), Pittsburgh, PA, USA

This paper systematically studies the limitations of the prevailing price-taker assumption for techno-economic analysis (TEA) and optimization of hybrid energy systems. As an illustrative case study, we retrofit an existing wind farm in the RTS-GMLC test system (which loosely mimics the Southwest U.S.) with battery energy storage to form an IES. Here, we show that the standard price-taker model overestimates the electricity revenue and the net present value (NPV) of the IES up to 178% and 50%, respectively, compared to our more rigorous multiscale optimization. These differences arise because introducing storage creates a more flexible resource that impacts the larger wholesale electricity market. Moreover, this work highlights the impact of the IES has on the market via various strategic bidding and underscores the importance of moving beyond price-taker for optimal storage sizing and TEA of IESs. We conclude by discussing opportunities to generalize the proposed framework to other IESs, and highlight emerging research questions regarding the complex interactions between IESs and markets.

• Research Organization: National Energy Technology Laboratory (NETL), Pittsburgh, PA, Morgantown, WV, and Albany, OR (United States)
• Sponsoring Organization: USDOE National Nuclear Security Administration (NNSA); USDOE Office of Fossil Energy and Carbon Management (FECM); USDOE Office of Nuclear Energy (NE); USDOE Office of Energy Efficiency and Renewable Energy (EERE), Office of Sustainable Transportation. Hydrogen Fuel Cell Technologies Office (HFTO)
• Grant/Contract Number: AC36-08GO28308; NA0003525
• OSTI ID: 2568253
• Journal Information: IEEE Transactions on Energy Markets, Policy and Regulation, Journal Name: IEEE Transactions on Energy Markets, Policy and Regulation; ISSN 2771-9626
• Publisher: IEEE
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
Production Cost Model
battery energy storage
energy markets
net present value
renewable energy