Electric Energy Storage Arbitrage in Electric Power Markets with Wind Uncertainty

Electric energy storage (EES) can bring many benefits to power grids and to electric power markets. However, as private investors, they make profits mainly by price arbitrage. In this paper, the impacts of EES arbitrage in electric power energy markets are studied. The charging or discharging activities for large-scale EES may have huge impacts on real-time locational marginal prices (LMPs). An optimization model is proposed to maximize the arbitrager's profits with the consideration of the charging and discharging impacts on the LMPs. Three charging policies are discussed to handle the uncertainty that the intermittent wind penetration brings to the power grid. Finally, an IEEE 118-bus system case study is carried out to evaluate the model and the different charging policies.