Including Demand Response and Battery Energy Storage Systems in Uniform Marginal Price Based Electricity Markets

Power systems are seeing a paradigm shift as a result of increasing system demand, penetration of distributed generation, and increasing deployment of renewable energy sources. Such developments have motivated Independent System Operators (ISO) to utilize options such as demand response (DR) and energy storage systems (ESS) for reliable and economic operation. In this paper, a new mathematical model is proposed for inclusion of DR and battery energy storage systems (BESS) in an uniform marginal price (UMP) based, day-ahead, co-optimized, energy and spinning reserve (SR) market. Case studies are carried out considering simultaneous participation of DR and BESS in UMP markets to examine their impact on system operation, market prices, and the benefits accrued by DR providers and BESS owners.