Optimal Offering of Energy Storage in Electricity Markets With Loop Blocks

Electricity market designs involving block orders have been recently gaining momentum, since they enable participants to implicitly express their operating characteristics, instead of explicitly disclosing them to the market operator, and address the effects of the increasing price uncertainty. However, the existing literature on optimizing participants' offering decisions in such markets has focused on generation participants, while it has not considered stand-alone energy storage participants, as well as a new type of block orders which has been specifically introduced to encapsulate the operating characteristics of storage - namely loop blocks (LB). This paper addresses this research gap by proposing a novel optimal offering model for a price-taking storage participant, which allows the representation and optimization of LB, while accounting for the price uncertainty encountered by the storage participant. The value of LB in increasing the storage participant's profitability and the computational performance of the proposed model are comprehensively analyzed, through both illustrative, small-scale (with respect to the number of considered price scenarios) studies and more realistic, large-scale studies considering two different storage technologies (battery storage and pumped-hydro storage).