Wholesale Market Participation of Storage with State-of-Charge Dependent Bids

Abstract: Wholesale market participation of storage with state-of-charge (SoC) dependent bids results in a non-convex cost in a multi-interval economic dispatch, which requires a mixed-integer linear program in the market clearing. We show that the economic dispatch can be convexified to the standard linear program when the SoC-dependent bid satisfies the equal decremental-cost ratio (EDCR) condition. Such EDCR bids are shown to support individual rationalities of all market participants in both the day-ahead multi-interval economic dispatch under locational marginal pricing and the rolling-window look-ahead dispatch under temporal-locational marginal pricing in the real-time market. A numerical example is presented to demonstrate a higher profit margin with an SoC-dependent bid over that from an SoC-independent bid.