Coordination of wind power producers with an energy storage system for the optimal participation in wholesale electricity markets

Abstract

The optimal participation of wind-based power resources within electricity markets confronts serious challenges due to the inherent uncertainty of wind speed. Accordingly, these units are forced to make take-or-pay contracts that are typically lower than market-clearing prices. Hence, wind power plants are not able to obtain the maximum possible amount of profit. One of the most promising solutions to deal with this matter is the coordination of wind-based units with flexible resources like energy storage systems. Therefore, this study presents a novel offering strategy of multiple Wind Producers (WPs) coordinated with a Battery Energy Storage System (BESS) in the form of a strategic Virtual Power Plant (VPP). To this end, a bi-level programming framework is proposed in which the VPP's expected profit is maximized at the upper-level (UL) through solving a two-stage stochastic problem. At the first stage, the VPP's optimal offers to the day-ahead (DA) market are determined before the realization of stochastic variables. At the second stage, this participant's real-time (RT) imbalance cost is optimized after determining the true value of uncertain parameters. On the contrary, at the lower-level (LL), the DA market-cleaning process is performed in the presence of conventional power producers. Moreover, this article aims to calculate the amount of net power trading of the VPP's components with the market and with one another. Ultimately, to assess the effectiveness of the provided framework, a sensitivity analysis is conducted by investigating the effect of the BESS presence on the wind-based VPP's optimal operation and expected benefit.