A Stochastic-Dynamic-Optimization Approach to Estimating the Capacity Value of Energy Storage

Energy storage can contribute to the resource-adequacy needs of power systems. However, the energy-limited nature of energy storage complicates estimating its resource-adequacy contribution. Energy storage that discharges to mitigate a loss-of-load event may have less energy available to mitigate a subsequent loss-of-load event. We present a stochastic-dynamic-optimization approach to capture such impacts endogenously. We demonstrate our approach using an example and two case studies, which show that energy storage's capacity value is sensitive to the load patterns of the system in which it is deployed.