Evaluation of Impact of Regulation Signal on Energy Storage Operation in PJM Regulation Market

Frequency regulation market, as one major application scenario for energy storage system (ESS), has been updating its market policies since FERC Order 755 was issued in 2011. The new pay-for-performance rules provide more opportunities for ESSs as fast ramping resources. This paper focuses on latest regulation market implementation in PJM. This paper outlines a simulation framework to estimate the potential maximum revenue of ESS from pay-for-performance regulation market participation. This framework consists of two different time-scale simulation layers, day-ahead hourly capacity scheduling layer and real-time dispatching layer. The sensitivity analysis was performed to investigate impacts of different parameter settings, e.g. regulation-up and regulation-down capacity factor, on storage resource operation in regulation market. Actual PJM regulation market data are applied and statistically analyzed in this study. The study results of this paper can be utilized to further improve BES optimal scheduling and operation.