Impact of strategic behavior and ownership of energy storage on provision of flexibility

Research output: Research - peer-reviewSpecial issue

Energy Storage Systems (ESS) are expected to provide additional flexibility to managed variable power flows in future power systems. It is believed that the business case for ESS as an alternative to traditional network reinforcements can be improved if the assets are able to access additional revenue streams by participating in energy and ancillary services markets. To enable this, the storage may need to be operated by private merchants to circumvent the unbundling principle applied in electricity markets today. However, it is not clear if the right incentives are in place for these entities to operate the ESS in a way that provides the required flexibility and supports the wider system benefits sought by the System Operator (SO). This work seeks to evaluate the impact of strategic behavior of an independent trader operating ESS in a nodal electricity market. The results indicated that a strategic bidder operating ESS tends to underuse the assets leading to suboptimal solution in terms of market welfare, as well as congestion and curtailment reduction, removing some of the potential benefits the ESS can provide to the power system.
Original languageEnglish
Pages (from-to)744 - 754
Number of pages11
JournalIEEE Transactions on Sustainable Energy
Issue number2
Early online date17 Dec 2015
StateE-pub ahead of print - 17 Dec 2015

    Research areas

  • bi-level programming, energy storage, ownership, offering strategy, price-based market clearing

Bibliographical note

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  1. Power Networks Research Academy (PNRA) - Epsrc Contribution

    Project: Research - StudentshipResearch Studentship

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