Strategic market participation of an energy storage system in a competitive electricity market considering short-run uncertainties

This thesis proposes an efficient method for scheduling and operating a power system with a single storage unit. The method utilizes a market clearing mechanism that incorporates distributed robust chance constraint (DRCC) methods to manage the risk associated with uncertain flexible technologies. The study assumes a fully centralized market setup and aims to optimize utility within the power sector while accounting for the presence of a storage system. The approach assumes an affine response to uncertainty, enabling the market operator to identify the most effective plan for executing flexibility to maximize social welfare in the day-ahead market and manage potential power imbalances in real-time operations. The dispatch mechanism takes into account the "availability costs" of flexible assets to manage their utilization efficiently. The study demonstrates that the proposed method enhances social welfare by taking advantage of the synergies between interconnected power networks and storage, particularly in situations where renewable energy generation is uncertain. However, the model is sensitive to the choice of price differences, availability costs, and investment costs, and cannot precisely advise building an energy storage system to provide flexibility response.