Multicommodity Nash-Cournot Market Model With Strategic Storage Operator

This article develops a Nash-Cournot model of multicommodity electricity market, co-optimizing energy and ancillary services, including a strategically behaving storage operator participating in both markets. The model is formulated as a centralized optimization problem and applied to the Ukraine day-ahead market. The impact of battery storage on the prices of energy and ancillary services products under various storage capacities and strategic storage operations is evaluated. It is shown that battery storage could significantly increase competition within the ancillary services market (primarily frequency containment reserves) and reduce prices. Storage with an installed capacity of 1000 MW could cut original frequency containment reserve prices by a third and provide part of its capacity to other ancillary services products.