Bidding system design for multiperiod electricity markets: Pricing of stored energy shiftability

In this paper, we design a bidding system for a multiperiod electricity market in which market players participate with power generators and energy storage resources. For the bidding system design, we first develop a sequential procedure to determine a separate multidimensional bid function, i.e., an ensemble of period-specific bid functions, which enables to regard the multiperiod electricity market as an ensemble of conventional period-specific electricity markets. This sequential determination also enables to construct a distributed approximate scheme for multiperiod electricity market clearing. Then, based on a basis transformation similar to the Fourier transformation, we propose a bidding system with explicit consideration of the pricing of energy shiftability. It is shown that, in the situation where the optimal price profile levels off due to high penetration of energy storage, the distributed approximate scheme in the Fourier-like basis can attain the optimal market clearing with the minimal social cost. In addition, we numerically investigate the resultant deadweight loss, i.e., an increase of social costs caused by approximation, varying the levels of energy storage penetration.