Convexifying Market Clearing of SoC-Dependent Bids from Merchant Storage Participants

TL;DR

This paper proposes a simple restriction on SoC-dependent bids from merchant storage to convexify the market clearing problem, enabling practical implementation of more realistic storage bidding strategies.

Contribution

It introduces a restriction that transforms non-convex SoC-dependent bid problems into convex linear programs, facilitating market clearing with realistic storage bids.

Findings

The restricted bidding format removes non-convexities.

The resulting problem is a convex piece-wise linear program.

Implementation of SoC-dependent bids becomes practical.

Abstract

State-of-charge (SoC) dependent bidding allows merchant storage participants to incorporate SoC-dependent operation and opportunity costs in a bid-based market clearing process. However, such a bid results in a non-convex cost function in the multi-interval economic dispatch and market clearing, limiting its implementation in practice. We show that a simple restriction on the bidding format removes the non-convexity, making the multi-interval dispatch of SoC-dependent bids a standard convex piece-wise linear program.