A simple way to integrate distributed storage into a wholesale electricity market
Current plans to decarbonize the electric supply system imply that the generation from wind and solar sources will grow substantially. This growth will increase the uncertainty of system operations due to the inherent variability of these renewable sources, and as a result, more reserve capacity wil...
| Main Authors: | , , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
Springer US
2024
|
| Online Access: | https://hdl.handle.net/1721.1/153256 |
| _version_ | 1826197825386446848 |
|---|---|
| author | Lamadrid, Alberto J. Lu, Hao Mount, Timothy D. |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Lamadrid, Alberto J. Lu, Hao Mount, Timothy D. |
| author_sort | Lamadrid, Alberto J. |
| collection | MIT |
| description | Current plans to decarbonize the electric supply system imply that the generation from wind and solar sources will grow substantially. This growth will increase the uncertainty of system operations due to the inherent variability of these renewable sources, and as a result, more reserve capacity will be required to provide the ramping (flexibility) needed for reliable operations. This paper assumes that all of the increased uncertainty comes from wind farms on the grid, and it shows how distributed storage managed locally by aggregators can provide the ramping needed without introducing a separate market for flexibility. This can be accomplished when the aggregators minimize the expected daily cost of the energy purchased from the grid for their customers by submitting optimal bids into the wholesale market with high and low price thresholds for discharging and charging the storage. This model is illustrated using a stochastic multi-period security constrained optimal power flow together with realistic data for a reduction of the network in the Northeast Power Coordinating Council region of the United States. The results show that the bidding strategy for distributed storage provides ramping to the grid just as effectively as storage managed by a system operator. |
| first_indexed | 2024-09-23T10:53:44Z |
| format | Article |
| id | mit-1721.1/153256 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T10:53:44Z |
| publishDate | 2024 |
| publisher | Springer US |
| record_format | dspace |
| spelling | mit-1721.1/1532562024-01-29T15:48:18Z A simple way to integrate distributed storage into a wholesale electricity market Lamadrid, Alberto J. Lu, Hao Mount, Timothy D. Sloan School of Management Current plans to decarbonize the electric supply system imply that the generation from wind and solar sources will grow substantially. This growth will increase the uncertainty of system operations due to the inherent variability of these renewable sources, and as a result, more reserve capacity will be required to provide the ramping (flexibility) needed for reliable operations. This paper assumes that all of the increased uncertainty comes from wind farms on the grid, and it shows how distributed storage managed locally by aggregators can provide the ramping needed without introducing a separate market for flexibility. This can be accomplished when the aggregators minimize the expected daily cost of the energy purchased from the grid for their customers by submitting optimal bids into the wholesale market with high and low price thresholds for discharging and charging the storage. This model is illustrated using a stochastic multi-period security constrained optimal power flow together with realistic data for a reduction of the network in the Northeast Power Coordinating Council region of the United States. The results show that the bidding strategy for distributed storage provides ramping to the grid just as effectively as storage managed by a system operator. 2024-01-02T14:45:50Z 2024-01-02T14:45:50Z 2023-12-30 2023-12-31T04:19:59Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/153256 Lamadrid, A.J., Lu, H. & Mount, T.D. A simple way to integrate distributed storage into a wholesale electricity market. J Regul Econ (2023). PUBLISHER_CC en https://doi.org/10.1007/s11149-023-09467-w Creative Commons Attribution https://creativecommons.org/licenses/by/4.0/ The Author(s) application/pdf Springer US Springer US |
| spellingShingle | Lamadrid, Alberto J. Lu, Hao Mount, Timothy D. A simple way to integrate distributed storage into a wholesale electricity market |
| title | A simple way to integrate distributed storage into a wholesale electricity market |
| title_full | A simple way to integrate distributed storage into a wholesale electricity market |
| title_fullStr | A simple way to integrate distributed storage into a wholesale electricity market |
| title_full_unstemmed | A simple way to integrate distributed storage into a wholesale electricity market |
| title_short | A simple way to integrate distributed storage into a wholesale electricity market |
| title_sort | simple way to integrate distributed storage into a wholesale electricity market |
| url | https://hdl.handle.net/1721.1/153256 |
| work_keys_str_mv | AT lamadridalbertoj asimplewaytointegratedistributedstorageintoawholesaleelectricitymarket AT luhao asimplewaytointegratedistributedstorageintoawholesaleelectricitymarket AT mounttimothyd asimplewaytointegratedistributedstorageintoawholesaleelectricitymarket AT lamadridalbertoj simplewaytointegratedistributedstorageintoawholesaleelectricitymarket AT luhao simplewaytointegratedistributedstorageintoawholesaleelectricitymarket AT mounttimothyd simplewaytointegratedistributedstorageintoawholesaleelectricitymarket |