The Equilibrium Model of Electricity Market with Consideration of the Pumped Storage GenCo

Abstract

Pumped storage is the largest-capacity form of grid energy storage available. A multi-period oligopolistic model for analyzing the bidding strategies of pumped storage GenCo (PSG) is proposed in this paper. In the pumping periods, the pumped storage unit (PSU) is simulated as a special load. While in generating periods, PSU is treated as a normal generator. In this model, all GenCos are assumed to exercise Cournot strategies to maximize their own profits. The resulting equilibrium formulation is established in terms of a mixed linear complementarity problem. The purpose of this paper is to provide an efficient simulation tool for the PSG to determine its bidding strategy in an oligopolistic environment. The proposed model can also be used to study various factors that may impact PSG’s profit. Results of a six-bus test system are analyzed to illustrate the characteristics of the proposed model.