Optimal participation of price-maker battery energy storage systems in energy and ancillary services markets considering degradation cost

This paper proposes a bi-level optimization framework to investigate the optimal market operation strategies of price-maker battery energy storage systems (BESSs) in real-time energy, spinning reserve, and pay as performance regulation markets, with special focus on understanding BESS’s excessive participation observed by several system operators impact degradation cost BESS activities. An accurate function is integrated into strategic bidding model. automatic generation control (AGC) signal dispatch model proposed deploy AGC signals framework. enables thorough studies for operating characteristics frequency market, when both detailed following activities are considered. Case synthetic real-world data performed study interactions between profit maximization wholesale operations, considering annual load ancillary service requirements variations. The impacts capacity replacement its revenue from services markets also investigated.