(513g) Multi-Market Bidding and Demand Response for Redox Reservoir-Based Electrochemical Devices Using Two-Stage Stochastic Optimization

The energy transition is driving process industries toward sustainable chemical production, necessitating reduced carbon emissions and improved resource efficiency [1]. A promising strategy involves integrating electrochemical (EC) devices with different power markets, enabling dual revenue streams from chemical production while enhancing grid flexibility [2]. While prior studies have explored multi-market participation of chlor-alkali plants [3], electrolyzers [4], battery energy storage systems [5], and virtual power plants [6], this work focuses on novel decoupled EC devices featuring Redox Reservoirs (RR) [7, 8]. Unlike traditional systems, RR-based EC devices enable independent and asynchronous chemical production at the cathode and anode , each operating at different rates and timescales [9]. This architecture allows dynamic modulation of power demand, offering a new form of demand-side flexibility. As a result, these systems can simultaneously engage in multiple electricity markets [10]—such as the day-ahead market (DAM), real-time market (RTM), and ancillary services like frequency regulation (FR)—thereby enhancing economic viability and supporting grid stability.

To enable the economic assessment of multi-market participation of RR-based EC devices, in this work we develop a two-stage stochastic optimization framework. In this study, we model a RR-based EC system that produces hydrogen at the cathode and persulfate at the anode as a representative case study for decoupled electrochemical synthesis [7]. The optimization framework accounts for key uncertainties, including day-ahead market (DAM) prices, real-time market (RTM) prices, and demand for the produced chemicals (hydrogen and persulfate). Using scenario-based forecasting to account for market uncertainties, we developed a two-stage optimization model. The optimization model maximizes the expected profits for the operating day subject to the EC system’s requirements and technical constraints. In the first stage, the optimization determines bidding strategies for DAM and FR markets. The model determines the bidding strategies that should be submitted to the DAM and FR markets for the whole day time horizon, which are the only binding decisions that affect the operation of the following day at this stage. In the second stage, a rolling-horizon optimization adjusts power setpoints for RTM participation, updating decisions as uncertainties in DAM prices are realized. This sequential approach ensures adaptive operation while honoring first-stage commitments. For benchmarking, we compare the proposed bidding strategy to a fixed operation baseline, where EC devices must operate both anodic and cathodic half-reactions simultaneously and at equal rates. We also quantify the benefit of using stochastic optimization by calculating the Value of the Stochastic Solution (VSS) [11]. Computational experiments using ERCOT market data highlight the economic and operational advantages of the decoupled electrochemical synthesis system. Results show that decoupling not only enables greater market flexibility but also enhances system responsiveness to dynamic electricity pricing.

References:
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[8] Wang, F., Li, W., Wang, R., Guo, T., Sheng, H., Fu, H.C., Stahl, S.S. and Jin, S., 2021. Modular electrochemical synthesis using a redox reservoir paired with independent half-reactions. Joule, 5(1), pp.149-165.

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[10] O. US EPA, “Power Market Structure,” 2022.

[11] Liu, G., Xu, Y. and Tomsovic, K., 2015. Bidding strategy for microgrid in day-ahead market based on hybrid stochastic/robust optimization. IEEE Transactions on Smart Grid, 7(1), pp.227-237.