Financial Storage Rights

Josh Taylor

Event Location: 

Mohler Lab, Room 453

Flexibility from energy storage and flexible load aggregations is essential to renewable energy integration. The broad adoption of storage in power systems is hindered by its cost and awkward regulatory rules. In this talk, we present a new financial mechanism that widens the economic viability of energy storage.

We begin with the question: Should energy storage buy and sell power at wholesale prices like utilities and generators, or should its physical and financial operation be asynchronous as with transmission lines? In the first case, storage straightforwardly profits through intertemporal arbitrage, also known as load shifting and peak shaving. In this talk, we consider the latter case, which we refer to as passive storage. Because passive storage does not make nodal price transactions, new mechanisms are necessary for its integration into electricity markets.

This issue is addressed by defining financial rights for storage. Like financial transmission rights, the new financial storage rights redistribute the system operator's merchandising surplus and enable risk-averse market participants to hedge against nodal price volatility resulting from storage congestion.

Bio Sketch: 

Josh A. Taylor received the B.S. degree from Carnegie Mellon University in 2006, and the S.M. and Ph.D. degrees from the Massachusetts Institute of Technology in 2008 and 2011, all in Mechanical Engineering. From 2011 to 2012, he was a postdoctoral researcher in Electrical Engineering and Computer Sciences at the University of California, Berkeley. He is currently an assistant professor in the Department of Electrical and Computer Engineering at the University of Toronto. His current research focuses on control and economics of electric power systems.