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Optimal Battery Storage Participation in European Energy and Reserves Markets

Author

Listed:
  • Kristina Pandžić

    (Croatian TSO (Hrvatski Operator Prijenosnog Sustava d.o.o.—HOPS), Zagreb 10000, Croatia
    These authors contributed equally to this work.)

  • Ivan Pavić

    (Department of Energy and Power Systems, Faculty of Electrical Engineering and Computing, University of Zagreb, Zagreb 10000, Croatia
    These authors contributed equally to this work.)

  • Ivan Andročec

    (Hrvatska Elektroprivreda d.d., Zagreb 10000, Croatia
    These authors contributed equally to this work.)

  • Hrvoje Pandžić

    (Department of Energy and Power Systems, Faculty of Electrical Engineering and Computing, University of Zagreb, Zagreb 10000, Croatia
    These authors contributed equally to this work.)

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.

Suggested Citation

  • Kristina Pandžić & Ivan Pavić & Ivan Andročec & Hrvoje Pandžić, 2020. "Optimal Battery Storage Participation in European Energy and Reserves Markets," Energies, MDPI, vol. 13(24), pages 1-21, December.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:24:p:6629-:d:462666
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    References listed on IDEAS

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    Cited by:

    1. Čović, Nikolina & Pavić, Ivan & Pandžić, Hrvoje, 2024. "Multi-energy balancing services provision from a hybrid power plant: PV, battery, and hydrogen technologies," Applied Energy, Elsevier, vol. 374(C).
    2. David P. Brown & Andrew Eckert & Douglas Silveira, 2023. "Strategic interaction between wholesale and ancillary service markets," Competition and Regulation in Network Industries, , vol. 24(4), pages 174-198, December.
    3. Kuttner, Leopold, 2022. "Integrated scheduling and bidding of power and reserve of energy resource aggregators with storage plants," Applied Energy, Elsevier, vol. 321(C).
    4. Lynch, Muireann & Longoria, Genaro & Curtis, John, 2021. "Market design options for electricity markets with high variable renewable generation," Utilities Policy, Elsevier, vol. 73(C).

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