Multi-Market Optimization of PV-Integrated Hybrid Energy Storage Systems for Frequency Regulation and Energy Trading

Abstract

This paper investigates the multi-market optimization of PV-integrated hybrid energy storage systems (HESS) for participation in frequency regulation and energy trading. A mixed-integer linear programming (MILP) model is developed to maximize system revenue by strategically allocating power across fast frequency response (FFR), frequency containment reserve for normal operation (FCR-N), and day-ahead (DA) energy markets. The model accounts for technical constraints, market rules, and BES degradation to provide a comprehensive optimization framework. A case study using real market data from Finland, along with PV generation data based on local solar irradiance and temperature measurements, demonstrates that HESS can effectively provide multiple services, with FFR and FCR-N emerging as the most profitable. Joint participation in energy and frequency regulation markets increases annual revenue by 544.8% compared to single-market strategies. Seasonal variations are evident, with revenue peaks driven by high PV output during months of increased solar radiation. While the joint market scenario results in slightly higher BES degradation, the substantial revenue gains offset the additional costs, ensuring economic viability. These findings provide valuable insights for optimizing PV-based HESS operation in competitive energy markets.