Reducing Price Volatility via Stochastic Storage Control in Power Networks: A Cyber-Physical Solution to Risky Electricity Markets
Insoon Yang

Citation
Insoon Yang. "Reducing Price Volatility via Stochastic Storage Control in Power Networks: A Cyber-Physical Solution to Risky Electricity Markets". Talk or presentation, 5, November, 2015.

Abstract
Electricity price volatility has been a significant concern for several market participants, including suppliers and load-serving entities, because risks imposed by price volatility increase uncertainty in their revenues. A large penetration of variable wind and solar generation is expected to further amplify price fluctuations. To reduce electricity price volatility, we propose a cyber-physical solution using energy storage, which has three major advantages. First, the proposed stochastic control approach optimally shifts energy over time and space (via physical transmission lines) by fully utilizing the distributional information of uncertain net demand. Second, the suggested storage operation by the System Operator does not interfere with currently used optimal economic dispatch rule in real-time markets and, hence, it is compatible with conventional electricity risk management tools. Third, the results of our numerical experiment show that only a small number of storage devices, which contribute little to saving generation costs, can considerably reduce price volatility. These results suggest that energy storage is particularly useful in mitigating price variations and that its value will stand underestimated if we neglect its utility in reducing price volatility. If time permits, we will discuss a new distributed operation of decentralized controllers, which is potentially attack-resilient.

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Citation formats

• HTML

  Insoon Yang. <a
  href="http://www.cps-forces.org/pubs/107.html"
  ><i>Reducing Price Volatility via Stochastic
  Storage Control in Power Networks:  A Cyber-Physical
  Solution to Risky Electricity Markets</i></a>,
  Talk or presentation,  5, November, 2015.

• Plain text

  Insoon Yang. "Reducing Price Volatility via Stochastic
  Storage Control in Power Networks:  A Cyber-Physical
  Solution to Risky Electricity Markets". Talk or
  presentation,  5, November, 2015.

• BibTeX

  @presentation{Yang15_ReducingPriceVolatilityViaStochasticStorageControlIn,
      author = {Insoon Yang},
      title = {Reducing Price Volatility via Stochastic Storage
                Control in Power Networks:  A Cyber-Physical
                Solution to Risky Electricity Markets},
      day = {5},
      month = {November},
      year = {2015},
      abstract = {Electricity price volatility has been a
                significant concern for several market
                participants, including suppliers and load-serving
                entities, because risks imposed by price
                volatility increase uncertainty in their revenues.
                A large penetration of variable wind and solar
                generation is expected to further amplify price
                fluctuations. To reduce electricity price
                volatility, we propose a cyber-physical solution
                using energy storage, which has three major
                advantages. First, the proposed stochastic control
                approach optimally shifts energy over time and
                space (via physical transmission lines) by fully
                utilizing the distributional information of
                uncertain net demand. Second, the suggested
                storage operation by the System Operator does not
                interfere with currently used optimal economic
                dispatch rule in real-time markets and, hence, it
                is compatible with conventional electricity risk
                management tools. Third, the results of our
                numerical experiment show that only a small number
                of storage devices, which contribute little to
                saving generation costs, can considerably reduce
                price volatility. These results suggest that
                energy storage is particularly useful in
                mitigating price variations and that its value
                will stand underestimated if we neglect its
                utility in reducing price volatility. If time
                permits, we will discuss a new distributed
                operation of decentralized controllers, which is
                potentially attack-resilient.},
      URL = {http://cps-forces.org/pubs/107.html}
  }
  

Posted by Carolyn Winter on 5 Nov 2015.
Groups: forces
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