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Optimal trading of imbalance options for power systems using an energy storage device

Dávid Zoltán Szabó, Peter Duck and Paul Johnson

European Journal of Operational Research, 2020, vol. 285, issue 1, 3-22

Abstract: Energy storage devices are coming online in electricity markets around the world but are still considered an expensive solution to the load balancing problem. We propose a new market framework in which the owner of an electricity storage facility is able to optimally sell options and trade in the electricity market to add flexibility for the system operator at different times of the day. The storage operator has the possibility to optimally decide which option to offer, with the restriction of having the storage device in the appropriate mode and only at particular times. The system operator accepts these offers as possible long-term real-time balancing resorts. With the storage device in place, either electricity consumption or generated electricity can be increased in the network and in our framework this happens accordingly via the exercise of the corresponding option.

Keywords: OR in energy; Electric energy storage systems; Optimal energy storage control policies; Real option; Power system balancing (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.ejor.2018.09.037

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