Competitive energy storage in the presence of renewables

Joshua A. Taylor, Duncan S. Callaway, Kameshwar Poolla

Research output: Contribution to journalArticlepeer-review

42 Scopus citations


A large fraction of new distributed generationwill use renewable sources, and cannot be treated as conventional generators due to high variability. Energy storage is a natural mechanism for absorbing variability, and hence minimizing costly reliance on generator reserves.We consider a simple scenario in which energy imbalances are allocated to energy storage, representing either cooperation with a renewable producer or competitive operation in markets. The optimal storage scheduling strategy is shown to be an inventory control-like policy, which through mild approximation yields affine relationships with the state variables.We develop and numerically evaluate suboptimal policies that approximately incorporate the effects of correlation. Further approximation enables us to characterize the Nash equilibria arising between generation and storage, which we use to analyze strategic effects. Specifically, we find that inefficient storage can lead to non-socially optimal behavior.

Original languageEnglish (US)
Article number6275459
Pages (from-to)985-986
Number of pages2
JournalIEEE Transactions on Power Systems
Issue number2
StatePublished - 2013
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Energy Engineering and Power Technology
  • Electrical and Electronic Engineering


  • Energy storage
  • Game theory
  • Inventory control
  • Reserve markets
  • Terms - Distributed generation


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