Energy Storage Bidding Strategy Coping with the Uncertainties of Renewable Resources

This paper considers the market operation of a merchant energy storage unit. The goal is to achieve the maximum operating profit through strategic bidding in the wholesale day ahead market. A bi-level profit maximization model is proposed which the upper-level problem is optimizing the storage bids and operational cost, while the lower-level problem is clearing the day-ahead market and passes the results to the upper-level. The expected uncertainties from the variable renewable generations and corresponding adaptions are considered in the power systems operations. This paper utilizes a mathematical programming problem with equilibrium constraints (MPEC) and Karush-Kuhn-Tucker (KKT) conditions to transform the bi-level problem into an equivalent single-level mixed-integer linear problem (MILP) which can be solved by the commercial solver. Two cases studied with the IEEE 6 Bus System demonstrate the benefits of the proposed day-ahead bidding strategy and the importance of considering uncertainties when the renewable generations are integrated into the power grid.