Multi-market Optimal Energy Storage Arbitrage with Capacity Blocking for Emergency Services

TL;DR

This paper develops a multi-market energy storage arbitrage model incorporating emergency services, capacity constraints, and interconnector dynamics, optimized via mixed integer linear programming for interconnected European markets.

Contribution

It introduces a novel optimization model that integrates emergency service provisions and capacity blocking into multi-market energy arbitrage with exact reformulation techniques.

Findings

Enhanced revenue through multi-market arbitrage

Effective capacity blocking for emergency services

Feasible computation times for real-world scenarios

Abstract

The future power system is increasingly interconnected via both AC and DC interconnectors. These interconnectors establish links between previously decoupled energy markets. In this paper, we propose an optimal multi-market energy storage arbitrage model that includes emergency service provisions for system operator(s). The model considers battery ramping and capacity constraints and utilizes operating envelopes calculated based on interconnector capacity, efficiency, dynamic energy injection and offshore wind generation in the day-ahead market. The arbitrage model considers two separate electricity prices for buying and selling of electricity in the two regions, connected via an interconnector. Using disjunctive linearization of nonlinear terms, we exactly reformulate the inter-regional energy arbitrage optimization as a mixed integer linear programming problem. We propose two capacity limit selection models for storage owners providing emergency services. The numerical analyses focus on two interconnections linking Belgium and the UK. The results are assessed based on revenue, operational cycles, payback period, shelf life and computation times.