A state-of-charge based formulation for storage participation in electricity markets: Technical Reference

We consider a storage device and develop a basic market design that represents the salient characteristics of storage such as state-of-charge (SOC) and round-trip efficiency. The contribution of this paper is a market design that reflects these technical characteristics, does not require bids and offers by the storage owner within the market horizon, but does require an end-of-horizon bid/offer for deviating the end-of-horizon SOC from the start-of-horizon SOC@. Small examples are used to illustrate the market design and large-scale implementation is considered. Several extensions are sketched in Appendices.