Sizing Co-located Storage for Uncertain Renewable Energy Sold Through Forward Contracts

Abstract

In this paper, we propose a high-level Stochastic steady-state model to analyze the value of co-located energy storage systems for wind power producers that participate in an electricity market through Forward or Day Ahead contracts. In particular, we try to find optimal sizing and contracting and stationary operating policies for profit maximization in the long-run. We obtain a stylized model calibrated to actual wind power production and electricity wholesale price data that allows us to asses the value of storage size and perform sensitivity analysis on key parameters such as contract prices, storage cost and storage efficiency.