Academic Publications

Coordinate Day-ahead Bidding with Continuous Intraday Trading

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In their article "The Value of Coordination in Multi-Market Bidding of Grid Energy Storage“ [1], Nils Löhndorf and David Wozabal consider the problem of optimal storage operation in an electricity market with a day-ahead auction and a continuous intraday market. The authors show that owners of storage are better off by coordinating trading activities across both markets. However, coordination is not current practice, due to the inherent complexity of the underlying decision problem. Rather, most power companies treat these markets as independent. To address this shortcoming, the two authors use QUASAR to formulate a multistage stochastic programming model of day-ahead bidding and hourly intraday trading along with a corresponding stochastic price model. The new model enables energy traders to calculate day-ahead bids that accounts for the option to rebalance their portfolio in the continuous market. The article demonstrates the usage of scenario trees to discretize intraday optionality and how to use quadratic programming to model market impact cost.

Interested to learn more about how to model and solve stochastic optimization problems with QUASAR®? Check out our QUASAR tutorials and interactive example notebooks in Google  Colab!

 

[1] Löhndorf N, Wozabal D. 2021. The value of coordination in multi-market bidding of grid energy storage. Forthcoming in Operations Research.