Optimal Battery Storage Participation in European Energy and Reserves Markets

Kristina Pandžić, Ivan Pavić, Ivan Andročec and Hrvoje Pandžić
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Kristina Pandžić: Croatian TSO (Hrvatski Operator Prijenosnog Sustava d.o.o.—HOPS), Zagreb 10000, Croatia
Ivan Pavić: Department of Energy and Power Systems, Faculty of Electrical Engineering and Computing, University of Zagreb, Zagreb 10000, Croatia
Ivan Andročec: Hrvatska Elektroprivreda d.d., Zagreb 10000, Croatia
Hrvoje Pandžić: Department of Energy and Power Systems, Faculty of Electrical Engineering and Computing, University of Zagreb, Zagreb 10000, Croatia

Energies, 2020, vol. 13, issue 24, 1-21

Abstract: Battery energy storage is becoming an important asset in modern power systems. Considering the market prices and battery storage characteristics, reserve provision is a tempting play fields for such assets. This paper aims at filling the gap by developing a mathematically rigorous model and applying it to the existing and future electricity market design in Europe. The paper presents a bilevel model for optimal battery storage participation in day-ahead energy market as a price taker, and reserve capacity and activation market as a price maker. It uses an accurate battery charging model to reliably represent the behavior of real-life lithium-ion battery storage. The proposed bilevel model is converted into a mixed-integer linear program by using the Karush–Kuhn–Tucker optimality conditions. The case study uses real-life data on reserve capacity and activation costs and quantities in German markets. The reserves activation quantities and activation prices are modeled by a set of credible scenarios in the lower-level problem. Finally, a sensitivity analysis is conducted to comprehend to what extent do battery storage bidding prices affect its overall profit.

Keywords: battery storage; day-ahead market; reserve market; optimal scheduling (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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