Optimal Operating for Battery Energy Storage System in Both Energy Market and Regulation Market

The power system faces more challenges with the development of human society. The battery energy storage system (BESS) can provide more flexibility to power systems and it can participate in multiple services in the power market to gain more profits. We focus on the problem that the BESS participating in both the energy and regulation markets. The BESS needs to determine how to respond to the automatic generation control (AGC) signal in the fine timescale and decide the capacity offering in the energy and regulation markets in the coarse timescale. We propose a two-timescale framework to solve this problem. We use an online method for regulation service while considering the battery's cycle life. And the simulation results of the regulation service are used to estimate the regulation revenue for each hour. Then stochastic dynamic programming (SDP) is used to calculate the capacity in the energy and regulation markets. We validate our method in the case study. It shows that the BESS can gain more profits by participating in both the energy and regulation markets.