Transmission Congestion Relief Using Privately Owned Large-Scale Energy Storage Systems in a Competitive Electricity Market

The trend of integrating more nondispatchable renewable sources into the electric grid and phasing out dispatchable fossil-fueled power plants in the near future reduces the operational flexibility, increases the chance of transmission congestion, and endangers the stability of electric system. Utilities are investigating the application of large-scale energy storage systems (ESSs) to address some of these imminent challenges to their power systems. In this paper, the application of privately owned large-scale ESSs for the purpose of congestion relief in transmission systems as an ancillary service is investigated. It is demonstrated that in conventional optimal dispatch algorithms for an ESS, the storage system cannot effectively contribute to congestion relief since the dispatch algorithm has not prepared the ESS in advance. Hence, a new real-time optimal dispatch (RTOD) algorithm is proposed that aims to generate revenue primarily by exploiting electricity price arbitrage opportunities in the day-ahead electricity market while optimally preparing the ESS to maximize its contribution to congestion relief as an ancillary service. A compressed-air ESS is sized and employed for evaluations of the proposed RTOD algorithm. The efficacy and feasibility of the proposed algorithm are validated using real-world price data from Ontario's wholesale electricity market. An analysis is presented regarding the appropriate amount of financial compensation for the ESS owner due to this contribution to congestion relief in the studied electricity market.