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:3014877

Chen, Xinhe ^[1]; Gao, Xian ^[1]; Guittet, Darice ^[2]; Tumbalam Gooty, Radhakrishna ^[3]; Knueven, Bernard ^[2]; Siirola, John ^[4]; Miller, David ^[3]; Dowling, Alexander ^[1]

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1. University of Notre Dame
2. National Laboratory of the Rockies, Golden, CO (United States)
3. National Energy Technology Laboratory
4. Sandia National Laboratories

Integrating renewable energy into the electric grid is challenging due to the intermittency and variability of wind and other non-dispatchable resources. Integrated energy systems (IESs) combine multiple energy technologies (e.g., fossil, nuclear, renewables, storage) to reduce costs and improve flexibility and reliability. However, standard techno-economic analysis (TEA) methods often overestimate the benefits of IESs because they fail to account for energy market adjustments. This paper systematically studies the limitations of the prevailing price-taker assumption for 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. 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 30.4%, 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 Laboratory of the Rockies (NLR), Golden, CO (United States)
• Sponsoring Organization: National Energy Technology Laboratory (NETL)
• DOE Contract Number: AC36-08GO28308
• OSTI ID: 3014877
• Report Number(s): NLR/JA-2C00-91364
• Journal Information: IEEE Transactions on Energy Markets, Policy and Regulation, Journal Name: IEEE Transactions on Energy Markets, Policy and Regulation Journal Issue: 3 Vol. 3
• Country of Publication: United States
• Language: English

Related Subjects

25 ENERGY STORAGE
29 ENERGY PLANNING, POLICY, AND ECONOMY
battery energy storage
energy markets
net present value
production cost models
renewable energy