Improved Market Mechanism for Energy Storage Based on Flexible State of Energy

In this paper, a new operational mode is proposed for energy storage, in which an improved semi-centralized mechanism is proposed for energy storage to participate in the day-ahead energy market. The new operational mode, i.e., the flexible state-of-energy (SOE) mode, is proposed based on the previous fixed SOE mode, under which the final SOE of energy storage at the end of the last period of the scheduling horizon is not limited to a predefined value. Accordingly, the value of the SOE is introduced to quantify the deviation cost of the final SOE from the predefined value. Under the proposed market mechanism, energy storage submits to the system operator the unit charging and discharging costs and the value of the SOE. The system operator dispatches the charging and discharging power of energy storage according to the data submitted and system operations. A comparative analysis is conducted in the case studies, and results demonstrate that the proposed mechanism is efficient in further realizing the flexibility potential of energy storage and reducing the total cost of the power system.