Assessing the Capacity Value of Energy Storage That Provides Frequency Regulation

Abstract

Due to complexity in determining its state of energy (SOE), multi-use applications complicate the assessment of energy storage's resource-adequacy contribution. SOE impacts resource-adequacy assessment because energy storage must have stored energy available to mitigate a loss of load. This paper develops a three-step process to assess the resource-adequacy contribution of energy storage that provides frequency regulation. First, we use discretized stochastic dynamic optimization to derive decision policies that tradeoff between different energy-storage applications. Next, the decision policies are used in a mixed-integer linear optimization that determines actual energy-storage operation in a rolling-horizon fashion. Finally, simulation is used to assess energy storage's resource-adequacy contribution. The methodology is demonstrated using a simple example and a case study that are based on actual real-world system data. We benchmark our proposed model to another that neglects frequency regulation and show the impacts of market design, frequency-regulation provision, and energy-storage size on the capacity value of energy storage.