Multi-type electricity market collaborative trading optimization model for stimulating the regulation potential of flexible resources: Experience from China's pumped storage plants

The large-scale deployment of renewable energy (RE) introduces dual challenges to the operation of power systems and electricity markets. The inherent uncertainty of RE output requires an increase in flexible resources (FR) within the system. However, the lower generation costs of RE sustain low market prices, thereby diminishing profit margins of FR. To address these issues, this study designs a collaborative trading mechanism for multi-type electricity markets that enhances regulatory potential of FR and develops a corresponding bidding model for validation. First, a collaborative trading mechanism for multi-type electricity markets, encompassing the energy market (EM), ancillary service market (AEM), and capacity market (CM), is proposed. Second, a bidding model for FR participation in these multi-type electricity markets is constructed. Finally, a typical FR, the pumped storage plant (PSP), is employed for simulation. The results indicate that: 1) Compared to the fixed-price subsidy mechanism, profit of PSP under the market mechanism increases by 5.59%. 2) Under the flexible ramping constraint, PSP prices in the CM increases by 95.57%, and in the EM and AEM, it increases by 14.81%. 3) When participating in bidding of multi-type electricity markets, profit of PSP grows by 19.27% compared to participating in a single-type market.