Economic Dispatch for Electricity Merchant with Energy Storage and Wind Plant: State of Charge based Decision Making Considering Market Impact and Uncertainties
This paper investigates how the market impact of electricity merchants and uncertainty of wind generation affect their co-optimized scheduling policy, specifically for merchants who have both energy storage and wind plants. In the existing literature, merchants' trading actions are usually assumed not to affect market prices; however, a large-scale energy storage merchant's actions can affect market prices. To this end, we approximate the electricity price by a linear function of the quantity of power traded by the merchant in the reward function to achieve decision-making incorporating the market impact. This paper utilizes the dynamic programming approach to analyze merchants' optimal multi-period decision-making incorporating market impact, uncertain wind generation, and energy storage constraints. First, our results demonstrate that for a merchant with co-located energy storage facilities and wind power plants, the energy storage's feasible state of charge (SOC) range can be segmented into four possible sub-ranges by three analytically developed SOC reference points. The unique optimal trading decision can be achieved by comparing the current energy inventory and the SOC references of the next period. Second, our results show that market impact and uncertainties substantially change the optimal storage scheduling policy by impacting the values of the reference points. To mitigate the negative effect of the merchant's market impact on buying and selling actions, the merchant may reduce the amount of generating or pumping electricity each period to maximize profit. Moreover, we identify and investigate the trade-off between market price and transaction quantity. Our findings provide co-optimized scheduling guidance for electricity merchants with co-located energy storage and renewable power plants systems.
J. Liu et al., "Economic Dispatch for Electricity Merchant with Energy Storage and Wind Plant: State of Charge based Decision Making Considering Market Impact and Uncertainties," Journal of Energy Storage, vol. 53, article no. 104816, Elsevier, Sep 2022.
The definitive version is available at https://doi.org/10.1016/j.est.2022.104816
Electrical and Computer Engineering
Keywords and Phrases
Dynamic Programming; Economic Dispatch; Market Impact; Pumped Storage Hydro; State of Charge; Wind Plants
International Standard Serial Number (ISSN)
Article - Journal
© 2022 Elsevier, All rights reserved.
01 Sep 2022
This work was supported by the U.S. Department of Energy, Grant DE-EE0008781.