Participation of Energy Storage in Electricity Markets: Strategic Withholding Behaviors and Equilibrium

Add to your list(s) Download to your calendar using vCal

• Bolun Xu, Columbia University
• Friday 21 March 2025, 14:00-15:00
• JDB Seminar Room, Department of Engineering and online (Zoom).

If you have a question about this talk, please contact Fulvio Forni.

Energy storage is rapidly reshaping electricity markets worldwide, with deployments accelerating in regions like California and Texas. While these resources offer flexibility that can reduce system costs and emissions, recent market data reveals that storage operators often engage in significant strategic withholding behaviors. Such behaviors—driven by complex and sometimes opaque cost structures (including degradation, opportunity, and risk premiums)—can lead to inefficient outcomes, elevated prices, and underutilization of storage during critical peak demand periods.

In this seminar, I will discuss the theoretical and practical implications of storage participation in two-stage electricity markets (day-ahead and real-time). I will present evidence from real-world market data (such as CAISO and ERCOT ) showing that current bidding practices can deviate substantially from the socially optimal outcomes. Informed by equilibrium models and agent-based simulations, we will quantify the resulting price impacts, system costs, and emission trade-offs, highlighting the “price of anarchy” that arises when storage owners operate independently.

Finally, I will introduce potential market design improvements and regulatory measures to mitigate inefficiencies, including state-of-charge-based cost curves and dynamic bid caps. These proposals aim to align private incentives with overall market efficiency—ensuring that storage fully delivers on its promise to bolster renewable integration, reduce emissions, and enhance power system reliability.

The seminar will be held in JDB Seminar Room , Department of Engineering, and online (zoom): https://newnham.zoom.us/j/92544958528?pwd=YS9PcGRnbXBOcStBdStNb3E0SHN1UT09

This talk is part of the CUED Control Group Seminars series.

This talk is included in these lists:

• All Talks (aka the CURE list)
• CUED Control Group Seminars
• Cambridge Centre for Data-Driven Discovery (C2D3)
• Cambridge University Engineering Department Talks
• Cambridge talks
• Centre for Smart Infrastructure & Construction
• Chris Davis' list
• Computational Continuum Mechanics Group Seminars
• Featured lists
• Information Engineering Division seminar list
• Interested Talks
• JDB Seminar Room, Department of Engineering and online (Zoom)
• School of Technology
• Signal Processing and Communications Lab Seminars
• Trust & Technology Initiative - interesting events
• bld31
• ndk22's list
• ob366-ai4er
• rp587

Note that ex-directory lists are not shown.