Storage Dispatch Modeling
The storage dispatch model optimizes battery operations under market and asset constraints. It determines how battery systems operate to maximize revenue while adhering to technical and market limitations. This capability is central to our investment analysis and trading simulations.
Battery Energy Storage Systems (BESS) are unique in their ability to act as both electricity consumers and producers, dynamically adjusting operations in response to market signals. Our storage dispatch model aligns with the power market schedule, treating the battery as a digital twin of a real trading asset. This is not a theoretical optimization in isolation but a practical representation of how a BESS participates, wins, or loses bids in each market.
Key Inputs to the Dispatch Model
The dispatch model integrates several critical input categories:
- Pricing: Day-ahead, intraday, and ancillary market price forecasts form the economic foundation of trading decisions.
- Technical Setup: Efficiency losses, degradation considerations, and state-of-charge (SoC) limits ensure realistic dispatch outcomes.
- Constraints: Substation capacities, ramping requirements, and time-based operational restrictions are explicitly modeled.
- Trading Configuration: Bid structures and participation rules define how the BESS competes in each market.
These inputs feed into the Re-Twin Optimization Model, which simulates sequential bidding decisions. The model mirrors real-world trading by submitting bids into each market, with some winning, others being rejected, and subsequent rounds adapting to prior results. This approach captures the inherent uncertainty and dynamics of market-based storage revenues.
Market-Wise Revenue Estimation
The model provides market-wise revenue estimates by aggregating results across all relevant markets. It applies user-selected strategies to estimate revenues for each market:
- Ancillary Services: Reserves capacity for markets like FCR and aFRR, generating revenue by making capacity available based on the battery’s power rating and substation capacity.
- Day-Ahead Integration: Accounts for participation in day-ahead market auctions together with the ancillary capacity services auctions.
- Intraday Market Adjustment: Pursues additional opportunities in intraday, aFRR energy, and imbalance markets based on day-ahead results.
Why Structure by Market Schedule?
Our dispatch framework offers an investor-grade methodology for evaluating BESS revenues under real market rules. Unlike perfect hindsight models, our approach incorporates conservative assumptions and reflects the operational challenges of bidding. The model can be customized with scenario-specific parameters based on user inputs, such as:
- Alternative bidding strategies
- Adjusted SoC or efficiency assumptions
- Region-specific constraints and rules
Ultimately, the dispatch model bridges the gap between forecasted market opportunities and practical asset operations, providing a realistic view of how a BESS generates revenue across Europe’s power markets.