Energy storage arbitrage under day-ahead and real-time price uncertainty
Electricity markets must match real-time supply and demand of electricity. With increasing penetration of renewable resources, it is important that this balancing is done effectively, considering the high uncertainty of wind and solar energy. Storing electrical energy can make the grid more reliable and efficient and energy storage is proposed as a complement to highly variable renewable energy sources. However, for investments in energy storage to increase, participating in the market must become economically viable for owners. This paper proposes a stochastic formulation of a storage owner’s arbitrage profit maximization problem under uncertainty in day-ahead (DA) and real-time (RT) market prices. The proposed model helps storage owners in market bidding and operational decisions and in estimation of the economic viability of energy storage. Finally, case study results on realistic market price data show that the novel stochastic bidding approach does significantly better than the deterministic benchmark.
- Research Organization:
- Argonne National Lab. (ANL), Argonne, IL (United States)
- Sponsoring Organization:
- Argonne National Laboratory - Laboratory Directed Research and Development (LDRD); USDOE
- Grant/Contract Number:
- AC02-06CH11357
- OSTI ID:
- 1358239
- Journal Information:
- IEEE Transactions on Power Systems, Vol. PP, Issue 99; ISSN 0885-8950
- Publisher:
- IEEECopyright Statement
- Country of Publication:
- United States
- Language:
- English
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