Control of Energy Storage with Market Impact: Lagrangian Approach and Horizons

Electricity storage is likely to play a significant role in balancing future energy systems. Often, much of the value of large-scale storage (e.g., pumped storage and hydro) may be captured in price arbitrage. In “Control of Energy Storage with Market Impact: Lagrangian Approach and Horizons,” J. Cruise, L. Flatley, R. Gibbens, and S. Zachary study the optimal control of storage that is sufficiently large as to impact on the market in which it operates and that seeks to maximize the profit that can be made by buying and selling over time. They develop the associated strong Lagrangian theory, which is of economic significance when storage is embedded in wider systems, and provide forecast and decision horizons for the optimal control, together with an algorithm suitable for control over an indefinite time period.