Optimizing Energy Storage Participation in Emerging Power Markets

TL;DR

This paper explores how different energy storage technologies can be optimized for participation in emerging power markets, demonstrating significant profit potential for ultra-capacitors and flywheels in regulation services.

Contribution

It introduces a comprehensive optimization framework for maximizing ESS profits in various demand response programs, considering novel ESS technologies and real-time operational policies.

Findings

Ultra-capacitors and flywheels can be up to 30 times more profitable than traditional batteries in regulation services.

Optimized ESS sizing and operation significantly enhance profit margins in demand response programs.

The framework effectively determines optimal reserve values and operational policies for different ESS types.

Abstract

The growing amount of intermittent renewables in power generation creates challenges for real-time matching of supply and demand in the power grid. Emerging ancillary power markets provide new incentives to consumers (e.g., electrical vehicles, data centers, and others) to perform demand response to help stabilize the electricity grid. A promising class of potential demand response providers includes energy storage systems (ESSs). This paper evaluates the benefits of using various types of novel ESS technologies for a variety of emerging smart grid demand response programs, such as regulation services reserves (RSRs), contingency reserves, and peak shaving. We model, formulate and solve optimization problems to maximize the net profit of ESSs in providing each demand response. Our solution selects the optimal power and energy capacities of the ESS, determines the optimal reserve value to provide as well as the ESS real-time operational policy for program participation. Our results highlight that applying ultra-capacitors and flywheels in RSR has the potential to be up to 30 times more profitable than using common battery technologies such as LI and LA batteries for peak shaving.