Energy Storage State-of-Charge Market Model

TL;DR

This paper proposes a new energy storage market model based on state-of-charge segments, improving bidding accuracy and operational efficiency over traditional power-based models, with significant profit and cost benefits demonstrated through simulations.

Contribution

It introduces a novel SoC segment market model for energy storage bidding, capturing SoC-dependent costs and operational characteristics more accurately than existing models.

Findings

Increases storage profit by 10-56% in simulations.

Reduces total system costs from storage by around 5%.

Helps reduce price volatility in the market.

Abstract

This paper introduces and rationalizes a new model for bidding and clearing energy storage resources in wholesale energy markets. Charge and discharge bids in this model depend on the storage state-of-charge (SoC). In this setting, storage participants submit different bids for each SoC segment. The system operator monitors the storage SoC and updates their bids accordingly in market clearings. Combined with an optimal bidding design algorithm using dynamic programming, our paper shows that the SoC segment market model provides more accurate representations of the opportunity costs of energy storage compared to existing power-based bidding models. The new model also captures the inherent SoC-dependent operational characteristics of energy storage. We benchmark the SoC segment market model against an existing single-segment model in price-taker and price-influencer simulations. The simulation results show that compared to the existing power-based bidding model, the proposed model improves profits by 10-56% in the price-taker case study; the model also improves total system cost reduction from storage by around 5%, and helps reduce price volatilities in the price-influencer case study.