A Stochastic Programming Framework for the Valuation of Electricity Storage
نویسنده
چکیده
It is often assumed in practice that electricity cannot be stored, even though in reality the storage of electricity is technically feasible. The issue is not whether electricity can be stored, but whether it can be stored efficiently and economically. In this paper, we present some of the current storage technologies and discuss their applications within power markets. We focus on the use of storage for intraday arbitrage and develop several models for optimizing the operation of a storage facility over a 24 hour period. The optimization problem has been framed as a linear program, a multi-stage stochastic program and a dynamic program. Two specific storage technologies, namely compressed air energy storage (CAES) and the sodium sulfur (NaS) battery, are modeled and analyzed within the separate optimization frameworks. We conclude with a sensitivity analysis of the model parameters and present an overall cost-benefit analysis of using electricity storage for arbitrage.
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