Real option valuation of a decremental regulation service provided by electricity storage.

ABSTRACT: This paper is a quantitative study of a reserve contract for real-time balancing of a power system. Under this contract, the owner of a storage device, such as a battery, helps smooth fluctuations in electricity demand and supply by using the device to increase electricity consumption. The battery owner must be able to provide immediate physical cover, and should therefore have sufficient storage available in the battery before entering the contract. Accordingly, the following problem can be formulated for the battery owner: determine the optimal time to enter the contract and, if necessary, the optimal time to discharge electricity before entering the contract. This problem is formulated as one of optimal stopping, and is solved explicitly in terms of the model parameters and instantaneou

SUBMITTER: Szabo DZ 

PROVIDER: S-EPMC5514356 | biostudies-literature | 2017 Aug

REPOSITORIES: biostudies-literature