A Coordinated Bidding Model for Wind Plant and Compressed Air Energy Storage Systems in the Energy and Ancillary Service Markets Using a Distributionally Robust Optimization Approach

Clean energy resources, like wind, have a stochastic nature, which involves uncertainties in the power system. Introducing energy storage systems (ESS) to the network can compensate for the uncertainty in wind plant output and allow the plant to participate in ancillary service markets. Advance in compressed air energy storage system (CAES) technologies and their fast response make them suitable for ancillary services. This paper investigates the participation of a combined energy system composed of wind plants and compressed air energy storage system (CAES) in the energy market from a private owner’s viewpoint, including trading in energy markets and bidding for frequency regulation and reserve capacity in ancillary service markets. Since this problem contains various uncertainties associated with market prices, wind generation levels, and regulation signals, distributionally robust optimization (DRO) is used to model the uncertainties and enhance the simultaneous participation of a combined wind-CAES system in day-ahead energy and ancillary service markets. This method combines the advantages of stochastic and robust optimization. In contrast to robust optimization (RO), the method consolidates specific statistical data to reduce conservative results. Simulation results demonstrate the proposed model’s effectiveness in handling uncertainties and provide a framework for investors in this area. In addition, case study analyses are applied to assess the model’s performance and validate the coordination of a wind plant and compressed air energy storage system in participating in a deregulated electricity market. Finally, DRO and RO are compared in modeling the uncertainties of the optimization problem. The optimal outputs demonstrate the effectiveness of DRO in terms of achieving higher realized profits with less conservative results.