Energy Storage Capacity Multiplexing With Risk and Expected Premium in Multimarket

As an important market entity, energy storage (ES) can participate in multiple electricity markets simultaneously and benefit from them. However, the current operation models for ES primarily concentrate on calculating market revenue, which fails to assess the risk and correlation of market prices accurately. Thus, this article designs an operation method for ES considering price risk and coupling in markets. First, a multiplexing scheme is designed for ES operation in multimarket, considering market price risk and market coupling. Second, generalized autoregressive conditional heteroskedasticity and exponentially weighted moving average models are introduced to precisely assess price risk, and a dynamic Copula method is designed to reflect the coupling coefficient. Furthermore, it introduces the concept of expected premium calculated through real options theory, allowing for more refined profit maximization strategies under positive fluctuating market conditions. Demonstrated with a real PJM multimarket-based framework, the proposed method leads to an 18.2% increase compared to the traditional portfolio method, which provides a new business model for ES to unlock its potential value.