Mechanism for fair distribution of day-ahead market value with energy storage participation

Abstract

In the existing locational marginal price mechanism, conventional generators have market manipulation power. When independently participating electricity market, the market share of energy storage plants can be suppressed and squeezed by each generator by taking strategic offers. Energy storage plants are prevented from participating in market clearing by traditional generators, and the total cost of indirect market clearing is caused to increase. To this end, a market competition mechanism is proposed in the paper that includes the participation of traditional units and energy storage power plants. Firstly, the drawbacks of the existing market settlement mechanism and the reasons hindering the participation of energy storage in market clearing are analyzed. Secondly, a market clearing model with energy storage participation is established, and a two-stage stochastic planning model is solved by using the sample mean approximation. Then, a day-ahead market value allocation mechanism adapted to the participation of energy storage is proposed based on the Vickrey-Clarke-Groves (VCG) settlement mechanism. Finally, a strategy to address the system issue imbalance of payments and revenues caused by incentive compatibility is proposed. The IEEE 30-node system is used in the paper. It is demonstrated that the mechanism satisfies the properties of incentive compatibility, imbalance of payments and revenues and weakening of the market manipulation power of conventional generators. The total cost of clearing the system is reduced and the risk is lowered in the face of sharp market price fluctuations.

Keywords

• electricity market
• locational marginal price
• incentive compatibility
• vickrey-clarke-groves (vcg) settlement mechanism
• stochastic planning
• imbalance of payments and revenues