Speaker: Dirk Lauinger (MIT Sloan School of Management and Energy Initiative)
Title: Storage participation in Electricity Markets: Arbitrage and Ancillary Services
Date: October 11, 2025
Time: 4:00 PM (via Zoom)
This is an online seminar. To obtain event details please send a message to department.
Abstract:
Electricity storage is used for intertemporal price arbitrage and for regulation, i.e., for balancing unforeseen fluctuations in electricity supply and demand. We present an optimization model that computes bids for both arbitrage and regulation, and ensures that storage operators can honor their market commitments at all times for all fluctuation signals in an uncertainty set that is inspired by applicable market regulations. We encode this requirement with an infinite number of nonconvex functional constraints. We show that these constraints are equivalent to a finite number of deterministic constraints, which leads to an exact bilinear reformulation and mixed-integer linear relaxations and restrictions. Empirical tests on the European electricity grid show a negligible gap between the relaxation and restriction. The model can account for intraday trading and serve as a building block for more complicated trading strategies, which become necessary as batteries saturate the markets for ancillary services.
Bio:
Dirk is a postdoc researching mathematical optimization techniques for the planning and operation of sustainable and reliable energy and mobility systems. Spanning the disciplines of operations research, energy engineering, and industrial ecology, his research finds applications in renewable energy integration, energy storage, electric transportation, energy and material supply security, global material cycles, resource economics, and policy analysis. Prior to joining the Shin group, Dirk was a postdoc with Andy Sun at MIT Sloan and MITEI.
Together with Andy’s group, he developed decomposition procedures for large-scale AC optimal power flow problems with unit commitment and ranked second in terms of overall prize money in the third edition of the Grid Optimization challenge organized by the US DOE. He obtained his PhD, MSc, and BSc from EPFL.