Impacts of Cooperative and Competitive Participation Modes of Battery Energy Storage Systems on Electricity Markets

Battery energy storage systems (BESS) have become an indispensable resource in power systems. As electricity markets mature, BESS will increasingly participate through marketbased dispatch mechanisms, either as an alliance or as independent operators. Since BESS charging/discharging behavior significantly influences market clearing prices and total costs, exploring its impact on electricity markets is crucial. This paper establishes a quantitative assessment framework to evaluate the impact of BESS participation patterns on electricity market clearing. A bi-level model is developed to simulate BESS operational strategies: the upper level maximizes BESS market revenues while the lower level minimizes total market costs. For the alliance model, the bi-level problem is transformed into a…