Comparison of energy storage operation in vertically integrated and market-based power system

Energy storage is expected to have a notable function in modern power systems. Its ability to act both as a load and as a generator, as well as its abundant ramp limits, make energy storage favorable in renewable energy intensive power systems. This paper presents two different environments of energy storage operation: operation under control of a vertically integrated power utility and as an independent entity in electricity market. Energy storage operation under vertically integrated power utility is analyzed using an augmented unit commitment model, while its operation in market environment is modelled as a bilevel program where the upper-level problem makes decisions on storage operation, while the lower-level problem simulates the market clearing procedure. Both models are mixed-integer programs modelled in GAMS and solved by CPLEX.