Capacity credit evaluation of generalized energy storage considering strategic capacity withholding and decision-dependent uncertainty

Ning Qi, Pierre Pinson, Mads R. Almassalkhi, Yingrui Zhuang, Yifan Su and Feng Liu

Applied Energy, 2025, vol. 397, issue C, No S0306261925010402

Abstract: This paper proposes a novel capacity credit evaluation framework to accurately quantify the contribution of generalized energy storage (GES) to resource adequacy, considering both strategic capacity withholding and decision-dependent uncertainty (DDU). To this end, we establish a market-oriented risk-averse coordinated dispatch method to capture the cross-market reliable operation of GES. The proposed method is sequentially implemented along with the Monte Carlo simulation process, coordinating the pre-dispatched price arbitrage and capacity withholding in the energy market with adequacy-oriented re-dispatch during capacity market calls. In addition to decision-independent uncertainties in operational states and baseline behavior, we explicitly address the inherent DDU of GES (i.e., the uncertainty of available discharge capacity affected by the incentives and accumulated discomfort) during the re-dispatch stage using the proposed data-driven distributionally robust chance-constrained approach. Furthermore, a capacity credit metric called equivalent storage capacity substitution is introduced to quantify the equivalent deterministic storage capacity of uncertain GES. Simulations on the modified IEEE RTS-79 benchmark system with 20 years real-world data from Elia demonstrate that the proposed method yields accurate capacity credit and improved economic performance. We show that the capacity credit of GES increases with more strategic capacity withholding but decreases with more DDU levels. Key factors, such as capacity withholding and DDU structure impacting GES’s capacity credit are analyzed with insights into capacity market decision-making.

Keywords: Capacity credit; Generalized energy storage; Capacity withholding; Decision-dependent uncertainty; Distributionally robust chance-constrained optimization; Capacity market (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.apenergy.2025.126310

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