Summary
Battery energy storage systems (BESS) have become an indispensable resource in power systems. As electricity markets mature, BESS will increasingly participate through marketbased dispatch mechanisms, either as an alliance or as independent operators. Since BESS charging/discharging behavior significantly influences market clearing prices and total costs, exploring its impact on electricity markets is crucial. This paper establishes a quantitative assessment framework to evaluate the impact of BESS participation patterns on electricity market clearing. A bi-level model is developed to simulate BESS operational strategies: the upper level maximizes BESS market revenues while the lower level minimizes total market costs. For the alliance model, the bi-level problem is transformed into a mathematical program with equilibrium constraints (MPEC) using Karush-Kuhn-Tucker (KKT) conditions.
Read more Read lessFor independent operators, an equilibrium problem with equilibrium constraints (EPEC) model is formulated accordingly. Case studies compare three scenarios: BESS participating as an alliance, as independent operators, and absent from the market. The impact on peak and valley clearing prices is quantified under each scenario, and differences in operational behaviors between the alliance and independent operators are analyzed. Operational revenues are identified as the key driver behind divergent operational strategies. Results indicate that the BESS alliance possesses greater market power, enabling it to influence market clearing and capture higher revenues than independent operators. However, concentrated arbitrage by the alliance can lead to a partial loss of social welfare. These findings highlight the need for reliable price signals and effective regulations to guide BESS dispatch and improve social welfare.
Additional informations
| Publication type | Session Materials |
|---|---|
| Reference | C5_11523_2026 |
| Publication year | |
| Publisher | CIGRE |
| Country | China, People's Republic of |
| Study committees | |
| File size | 2 MB |
| Price for non member | 30 € |
| Price for member | 30 € |
Authors
GUO Fei - Chongqing University; YONG Pei - Chongqing University; YU Juan - Chongqing University; YANG Zhifang - Chongqing University
Keywords
Battery Energy Storage Systems (BESS), Market-Based Dispatch, BESS Alliance, Independent BESS Operators, Market Power
