Dynamic optimization strategies for wind-storage systems in joint energy and ancillary markets with green certificate trading: A perspective from China

As energy spot markets mature and renewable portfolio standards (RPS) expands, integrated wind–storage systems (WSS) face increasingly coupled operational and market decisions. This paper investigates the optimal operational and bidding strategies of a price-taking WSS participating simultaneously in energy, ancillary regulation, and green certificate markets under evolving renewable policy frameworks. Leveraging a Markov Decision Process (MDP) based approach, we model the WSS’s decision-making process to dynamically adjust its energy and frequency regulation bids in response to forecasted wind generation, market price signals, and intertemporal state-of-charge dynamics. The two-stage solution uses day-ahead forecasts to construct an initial policy and hourly rolling adjustments to incorporate short-term updates to wind, prices, and regulation signals. A case study shows that joint-market participation enhances total revenues with EM as the anchor, while AM and GCM provide complementary value when coordinated with storage state and provenance constraints. The rolling procedure materially improves feasibility robustness and earnings. Scenario analyses, including wind-only participation, exclusion of AM, alternative storage allocation levels, and varying wind penetration and RPS targets, highlight the importance of storage allocation, dynamic bidding, and market design for more reliable and economically efficient renewable-dominant systems.