An Enhanced Computational Framework for Energy Storage Participation in Transmission Planning with Electricity Market Participation: Dynamic Market Participation Restriction Estimation

Abstract

In the previous study and report, we developed a computational framework to explore the technical and economic viability of the dual use of pumped storage hydropower (PSH) for both transmission assets and market participation. The rationale for the dual-use application is to improve the resource utilization rate and reduce the cost recovery burden. A PSH-based transmission solution generally has a large capacity, which corresponds to a higher investment cost compared to a traditional line solution. Market participation may allow the PSH asset to offset part of its high investment cost. A critical question is whether it is economically and technically viable to allow dual use of a PSH-based transmission project without jeopardizing transmission system reliability. And a more specific follow-up question is how to improve market participation performance while maintaining transmission reliability. In this study, we extend the computational framework by updating the method to determine transmission service obligation requirements dynamically based on the possibility of the need for transmission service in operation. Specifically, we correlate the need for transmission service with the probability of thermal overloading on a monitored transmission line, which is essentially based on the probability distribution of power flow and its probability of exceeding the line rating based on system dispatch and operational uncertainties. In addition, the need depends on the level of risk that a system operator is willing to take. The higher the risk tolerance, the lower the requirement that the system operator would apply to the PSH project as a transmission asset. The requirements are updated every day before the PSH project determines its market participation strategy. With the updated transmission service requirements, it is expected that a PSH project can serve as a transmission asset when the transmission system is at risk and really needs it, while it can participate in a market with sufficient information and certain restrictions. In this way, the transmission service quality and market participation performance can both be improved.