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arXiv · 1612.00179

Online Offering Strategies for Storage-Assisted Renewable Power Producer in Hour-Ahead Market

Lin Yang·Mohammad H. Hajiesmaili·Hanling Yi·Minghua Chen
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Abstract

A promising approach to hedge against the inherent uncertainty of renewable generation is to equip the renewable plants with energy storage systems. This paper focuses on designing profit maximization offering strategies, i.e., the strategies that determine the offering price and volume, for a storage-assisted renewable power producer that participates in hour-ahead electricity market. Designing the strategies is challenging since (i) the underlying problem is coupled across time due to the evolution of the storage level, and (ii) inputs to the problem including the renewable output and market clearing price are unknown when submitting offers. Following the competitive online algorithm design approach, we first study a basic setting where the renewable output and the clearing price are known for the next hour. We propose sOffer, a simple online offering strategy that achieves the best possible competitive ratio of O(log θ), where $θ$ is the ratio between the maximum and the minimum clearing prices. Then, we consider the case where the clearing price is unknown. By exploiting the idea of submitting multiple offers to combat price uncertainty, we propose mOffer, and demonstrate that the competitive ratio of mOffer converges to that of sOffer as the number of offers grows. Finally, we extend our approach to the scenario where the renewable output has forecasting error. We propose gOffer as the generalized offering strategy and characterize its competitive ratio as a function of the forecasting error. Our trace-driven experiments demonstrate that our algorithms achieve performance close to the offline optimal and outperform a baseline alternative significantly.

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Lin Yang, Mohammad H. Hajiesmaili, Hanling Yi, Minghua Chen. 2016-12-01. Online Offering Strategies for Storage-Assisted Renewable Power Producer in Hour-Ahead Market. https://arxiv.org/abs/1612.00179

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