Energy Storage Participation in Wholesale Markets: The Impact of State-of-Energy Management

Wholesale electricity markets are undergoing reforms to allow greater participation of energy storage. These raise questions regarding the roles market operators in energy-storage management and design market-participation models offer parameters for This paper examines implications state-of-energy (SOE) management. To this end, we develop a bi-level stochastic optimization model, wherein upper level represents profit-maximizing firm offering into wholesale market. Lower-level problems represent clearing under different uncertain operating conditions. Using complementarity theory binary expansion, model is recast as single-level mixed-integer linear problem, which can be solved using off-the-shelf software packages. We apply an illustrative example comprehensive case study. demonstrate that with uncertainty, self scheduling storage suboptimal firm. Relying on only manage SOE yield strategic behavior, whereby infeasible offers submitted affect dispatch prices. findings guide ongoing market-design reforms.