Optimal Bidding Strategy for PV and BESSs in Joint Energy and Frequency Regulation Markets Considering Carbon Reduction Benefits

Abstract

Photovoltaic (PV) and battery energy storage systems (BESSs) are key components in the energy market and crucial contributors to carbon emission reduction targets. These systems can not only provide energy but can also generate considerable revenue by providing frequency regulation services and participating in carbon trading. This study proposes a bidding strategy for PV and BESSs operating in joint energy and frequency regulation markets, with a specific focus on carbon reduction benefits. A two-stage bidding framework that optimizes the profit of PV and BESSs is presented. In the first stage, the day-ahead energy market takes into account potential real-time forecast deviations. In the second stage, the real-time balancing market uses a rolling optimization method to account for multiple uncertainties. Notably, a real-time frequency regulation control method is proposed for the participation of PV and BESSs in automatic generation control (AGC). This is particularly relevant given the uncertainty of grid frequency fluctuations in the optimization model of the real-time balancing market. This control method dynamically assigns the frequency regulation amount undertaken by the PV and BESSs according to the control interval in which the area control error (ACE) occurs. The case study results demonstrate that the proposed bidding strategy not only enables the PV and BESSs to effectively participate in the grid frequency regulation response but also yields considerable carbon emission reduction benefits and effectively improves the system operation economy.