Optimal Bidding and Coordinated Dispatch of Hybrid Energy Systems in Regulation Markets

The increasing integration of renewable energy sources and distributed energy resources (DER) into modern power systems introduces significant uncertainty, posing challenges for maintaining grid flexibility and reliability. Hybrid energy systems (HES), composed of controllable generators, flexible loads, and battery storage, offer a decentralized solution to enhance flexibility compared to single centralized resources. This paper presents a two-level framework to enable HES participation in frequency regulation markets. The upper level performs a chance-constrained optimization to choose capacity bids based on historical regulation signals. At the lower level, a real-time control strategy disaggregates the regulation power among the constituent resources. This real-time control strategy is then benchmarked against an offline optimal dispatch to evaluate flexibility performance. Additionally, the framework evaluates the profitability of overbidding strategies and identifies thresholds beyond which performance degradation may lead to market penalties or disqualification. The proposed framework also compare the impact of imbalance of power capacities on performance and battery state of charge (SoC) through asymmetric HES configurations.