Strategic bidding of price-maker energy storage systems in electricity markets with limited information

Dunjian Xie and Yan Xu

Applied Energy, 2025, vol. 390, issue C, No S0306261925005549

Abstract: Utility-scale energy storage systems (ESSs) are increasingly participating in the electricity market and may influence market prices as price-makers. However, many electricity markets only disclose limited market information, e.g., the National Electricity Market of Singapore (NEMS) which does not release network parameters and rival bidding data, making it challenging for ESSs to make optimal bidding decisions. This paper uses NEMS as a case study to propose a generic strategic bidding strategy for price-maker ESSs with limited information, which only requires the publicly available demand data and its market clearing price. Through statistical analysis of historical data, the clearing price is modeled using Stochastic Price Quota Curves (SPQCs), which capture price probability distributions as a function of ESS bidding decisions. Integrating SPQCs into the bidding model results in a stochastic nonlinear problem with decision-dependent uncertainties. To address this, the problem is reformulated into a deterministic equivalent using SPQC expectations, and a specific trust-region-based iterative solution algorithm is proposed. A case study with real NEMS data validates the effectiveness of the method.

Keywords: Decision-dependent uncertainty; Utility-scale energy storage system; Bidding strategy; Information disclosure; Singapore electricity market (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.apenergy.2025.125824

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