Integrating Energy Storage Devices Into Market Management Systems

Intuitively, the integration of energy storage technologies such as pumped hydro and batteries into vertically integrated utility and independent system operator/regional transmission operator (ISO/RTO)-scale systems should confer significant benefits to operations, ranging from mitigation of renewables generation variability to peak shaving. However, the realized benefits of such integration are highly dependent upon the environment in which the integration occurs. Further, integration of storage requires careful modeling extensions of existing market management systems (MMSs), which are currently responsible for market and reliability operations in the grid. In this paper, we outline the core issues that arise when integrating storage devices into an MMS system, ranging from high-level modeling of storage devices for purposes of unit comment and economic dispatch to the potential need for new mechanisms to more efficiently allow for storage to participate in market environments. We observe that the outcomes of cost-benefit analyses of storage integration are sensitive to system-specific details, e.g., wind penetration levels. Finally, we provide an illustrative case study showing significant positive impacts of storage integration.