Joint Equilibrium Analysis of Wholesale Electricity Market and Energy Storage Trading Market

In power systems insufficient off-peak-load cycling capacity will impose a negative impact on the accommodation of renewable energy. The development and application of energy storage (ES) technology provide an effective way to mitigate this problem. To attract investment in ES technology and examine the market value of ES, it is necessary to introduce a market-oriented operation mechanism of ES technology considering the target of renewable energy accommodation in off-peak-load periods. Specifically, an energy storage aggregator (ESA) purchases ES resources from an ES trading market and participates in the wholesale electricity market competition. To attract the ESA’s participation in renewable energy accommodation in off-peak-load periods, an incentive compensation for the ESA in off-peak-load periods is introduced. Furthermore, based on the operation mechanism, a multi-period joint equilibrium model for the wholesale electricity market and ES trading market is developed. In the wholesale electricity market, conventional generators and ESA bid via the supply function and Cournot mode respectively. In the ES trading market, ES customers bid via the supply function. Numerical results illustrate the effectiveness and reasonableness of the proposed mechanism.