Participation of Electric Storage Resources in the NYISO Electricity and Frequency Regulation Markets

This paper presents an approach for electric storage resources (ESRs) to maximize revenue from participation in the day-ahead NYISO electricity and ancillary services markets for two cases. The first case is arbitrage where the ESR system purchases electricity in times of low prices and sells it when the price is high; the second case involves arbitrage combined with the ancillary service known as frequency regulation. In the proposed approach the maximization problem is formulated using linear programming. The paper uses a case study to show that the second case generates more revenue than the first one and that the optimal solution of this case essentially consists of purchasing power to provide frequency regulation. The paper correlates the revenue in this case with the capacity prices of the frequency regulation service. Finally, the paper shows how the NYISO performance index affects the revenue of ESR.