Microeconomic Analysis of Multiperiod Energy Markets: Intertemporal Pricing of Dispatchable Generators, Storage Batteries, and Uncertain Renewable Resources

Abstract

This paper presents modeling and analysis of day- ahead multiperiod energy markets in which each competitive player aims at making the highest profit by managing a complex mixture of different energy resources, such as conventional generators, storage batteries, and uncertain renewable resources. The market model is given as a nested convex program, the nested structure of which is found to be essential for intertemporal dispatchability characterization and renewable energy uncertainty absorption. Furthermore, in view of social economy as well as personal economy, numerical analysis is performed on the premise of certain photovoltaic penetration levels. This numerical analysis shows that renewable generators do not always have priority of energy supply higher than conventional generators due to their uncertainty and limited dispatchability, and that there is a social equilibrium of battery penetration levels, at which maximum personal profit with respect to battery system enhancement is attained.