IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v140y2015icp395-408.html
   My bibliography  Save this article

Optimisation of size and control of grid-connected storage under real time electricity pricing conditions

Author

Listed:
  • Dufo-López, Rodolfo

Abstract

In this paper, a storage system has been considered to be added to a private electricity facility in order to reduce the electricity bill. This kind of system could make sense with a time-of-use (TOU) tariff (with two or three periods of different electricity price) or a real-time pricing (RTP) tariff (which can vary hourly depending on wholesale market), where each day, electricity is bought from the AC grid during off-peak hours (at low price) to store energy, and during on-peak hours (at high price), the storage supplies the whole load or a part, avoiding the purchase of expensive electricity from the AC grid. A new optimisation model to obtain the best storage size and control of the charge–discharge process under RTP tariff has been developed, minimising the net present cost of the system. This methodology allows the electricity consumer to evaluate the profitability of adding storage. A case study of battery storage with a hypothetical hourly RTP tariff based on the Spanish electricity market pool of 2013 is shown. Considering the cost of batteries per kWh cycled expected in the near future (0.045€/kWhcycled), even the optimal storage size with the optimal control is not profitable compared to the system without storage. A much lower battery cost (0.0225€/kWhcycled) would be needed so that the storage system could be economically profitable. Considering a stretched RTP hourly pricing tariff (hourly prices higher than the average of each day multiplied by 1.3 and the lower ones by 0.7), the storage system with the costs expected in the near future (0.045€/kWhcycled) is profitable. We conclude that an hourly tariff that takes the base of the Spanish electricity market pool is not adequate to stimulate this technology, as the difference between maximum and minimum prices during the day is too low to compensate the capital cost plus replacement, operation, and maintenance of the storage system. In other countries, with much higher difference between minimum and maximum electricity price of the day, present battery cost could make it profitable.

Suggested Citation

  • Dufo-López, Rodolfo, 2015. "Optimisation of size and control of grid-connected storage under real time electricity pricing conditions," Applied Energy, Elsevier, vol. 140(C), pages 395-408.
    • Handle: RePEc:eee:appene:v:140:y:2015:i:c:p:395-408
    DOI: 10.1016/j.apenergy.2014.12.012
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261914012616
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2014.12.012?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dallinger, David & Gerda, Schubert & Wietschel, Martin, 2013. "Integration of intermittent renewable power supply using grid-connected vehicles – A 2030 case study for California and Germany," Applied Energy, Elsevier, vol. 104(C), pages 666-682.
    2. Walawalkar, Rahul & Apt, Jay & Mancini, Rick, 2007. "Economics of electric energy storage for energy arbitrage and regulation in New York," Energy Policy, Elsevier, vol. 35(4), pages 2558-2568, April.
    3. Battke, Benedikt & Schmidt, Tobias S. & Grosspietsch, David & Hoffmann, Volker H., 2013. "A review and probabilistic model of lifecycle costs of stationary batteries in multiple applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 240-250.
    4. Di Giorgio, Alessandro & Liberati, Francesco, 2014. "Near real time load shifting control for residential electricity prosumers under designed and market indexed pricing models," Applied Energy, Elsevier, vol. 128(C), pages 119-132.
    5. Sioshansi, Ramteen & Denholm, Paul & Jenkin, Thomas & Weiss, Jurgen, 2009. "Estimating the value of electricity storage in PJM: Arbitrage and some welfare effects," Energy Economics, Elsevier, vol. 31(2), pages 269-277, March.
    6. Mulder, Grietus & Six, Daan & Claessens, Bert & Broes, Thijs & Omar, Noshin & Mierlo, Joeri Van, 2013. "The dimensioning of PV-battery systems depending on the incentive and selling price conditions," Applied Energy, Elsevier, vol. 111(C), pages 1126-1135.
    7. Zhao, Jiayun & Kucuksari, Sadik & Mazhari, Esfandyar & Son, Young-Jun, 2013. "Integrated analysis of high-penetration PV and PHEV with energy storage and demand response," Applied Energy, Elsevier, vol. 112(C), pages 35-51.
    8. Zucker, Andreas & Hinchliffe, Timothée, 2014. "Optimum sizing of PV-attached electricity storage according to power market signals – A case study for Germany and Italy," Applied Energy, Elsevier, vol. 127(C), pages 141-155.
    9. Shcherbakova, Anastasia & Kleit, Andrew & Cho, Joohyun, 2014. "The value of energy storage in South Korea’s electricity market: A Hotelling approach," Applied Energy, Elsevier, vol. 125(C), pages 93-102.
    10. Velik, Rosemarie & Nicolay, Pascal, 2014. "Grid-price-dependent energy management in microgrids using a modified simulated annealing triple-optimizer," Applied Energy, Elsevier, vol. 130(C), pages 384-395.
    11. Madlener, Reinhard & Latz, Jochen, 2013. "Economics of centralized and decentralized compressed air energy storage for enhanced grid integration of wind power," Applied Energy, Elsevier, vol. 101(C), pages 299-309.
    12. Zheng, Menglian & Meinrenken, Christoph J. & Lackner, Klaus S., 2014. "Agent-based model for electricity consumption and storage to evaluate economic viability of tariff arbitrage for residential sector demand response," Applied Energy, Elsevier, vol. 126(C), pages 297-306.
    13. McKenna, Eoghan & McManus, Marcelle & Cooper, Sam & Thomson, Murray, 2013. "Economic and environmental impact of lead-acid batteries in grid-connected domestic PV systems," Applied Energy, Elsevier, vol. 104(C), pages 239-249.
    14. Dufo-López, Rodolfo & Lujano-Rojas, Juan M. & Bernal-Agustín, José L., 2014. "Comparison of different lead–acid battery lifetime prediction models for use in simulation of stand-alone photovoltaic systems," Applied Energy, Elsevier, vol. 115(C), pages 242-253.
    15. Santos, João M. & Moura, Pedro S. & Almeida, Aníbal T. de, 2014. "Technical and economic impact of residential electricity storage at local and grid level for Portugal," Applied Energy, Elsevier, vol. 128(C), pages 254-264.
    16. Krajačić, Goran & Lončar, Dražen & Duić, Neven & Zeljko, Mladen & Lacal Arántegui, Roberto & Loisel, Rodica & Raguzin, Igor, 2013. "Analysis of financial mechanisms in support to new pumped hydropower storage projects in Croatia," Applied Energy, Elsevier, vol. 101(C), pages 161-171.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hernández, J.C. & Sanchez-Sutil, F. & Muñoz-Rodríguez, F.J. & Baier, C.R., 2020. "Optimal sizing and management strategy for PV household-prosumers with self-consumption/sufficiency enhancement and provision of frequency containment reserve," Applied Energy, Elsevier, vol. 277(C).
    2. Kusakana, Kanzumba, 2017. "Energy management of a grid-connected hydrokinetic system under Time of Use tariff," Renewable Energy, Elsevier, vol. 101(C), pages 1325-1333.
    3. Masebinu, S.O. & Akinlabi, E.T. & Muzenda, E. & Aboyade, A.O., 2017. "Techno-economics and environmental analysis of energy storage for a student residence under a South African time-of-use tariff rate," Energy, Elsevier, vol. 135(C), pages 413-429.
    4. Kim, S.K. & Cho, K.H. & Kim, J.Y. & Byeon, G., 2019. "Field study on operational performance and economics of lithium-polymer and lead-acid battery systems for consumer load management," Renewable and Sustainable Energy Reviews, Elsevier, vol. 113(C), pages 1-1.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Graditi, G. & Ippolito, M.G. & Telaretti, E. & Zizzo, G., 2016. "Technical and economical assessment of distributed electrochemical storages for load shifting applications: An Italian case study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 515-523.
    2. Shcherbakova, Anastasia & Kleit, Andrew & Cho, Joohyun, 2014. "The value of energy storage in South Korea’s electricity market: A Hotelling approach," Applied Energy, Elsevier, vol. 125(C), pages 93-102.
    3. Ding, Jie & Xu, Yujie & Chen, Haisheng & Sun, Wenwen & Hu, Shan & Sun, Shuang, 2019. "Value and economic estimation model for grid-scale energy storage in monopoly power markets," Applied Energy, Elsevier, vol. 240(C), pages 986-1002.
    4. Metz, Dennis & Saraiva, João Tomé, 2018. "Simultaneous co-integration of multiple electrical storage applications in a consumer setting," Energy, Elsevier, vol. 143(C), pages 202-211.
    5. Cho, Joohyun & Kleit, Andrew N., 2015. "Energy storage systems in energy and ancillary markets: A backwards induction approach," Applied Energy, Elsevier, vol. 147(C), pages 176-183.
    6. Khan, Agha Salman M. & Verzijlbergh, Remco A. & Sakinci, Ozgur Can & De Vries, Laurens J., 2018. "How do demand response and electrical energy storage affect (the need for) a capacity market?," Applied Energy, Elsevier, vol. 214(C), pages 39-62.
    7. Zakeri, Behnam & Syri, Sanna, 2015. "Electrical energy storage systems: A comparative life cycle cost analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 569-596.
    8. Weitzel, Timm & Glock, Christoph H., 2018. "Energy management for stationary electric energy storage systems: A systematic literature review," European Journal of Operational Research, Elsevier, vol. 264(2), pages 582-606.
    9. Parra, David & Patel, Martin K., 2016. "Effect of tariffs on the performance and economic benefits of PV-coupled battery systems," Applied Energy, Elsevier, vol. 164(C), pages 175-187.
    10. Telaretti, E. & Graditi, G. & Ippolito, M.G. & Zizzo, G., 2016. "Economic feasibility of stationary electrochemical storages for electric bill management applications: The Italian scenario," Energy Policy, Elsevier, vol. 94(C), pages 126-137.
    11. Carlos J. Sarasa-Maestro & Rodolfo Dufo-López & José L. Bernal-Agustín, 2016. "Analysis of Photovoltaic Self-Consumption Systems," Energies, MDPI, vol. 9(9), pages 1-18, August.
    12. Boßmann, Tobias & Eser, Eike Johannes, 2016. "Model-based assessment of demand-response measures—A comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1637-1656.
    13. Zucker, Andreas & Hinchliffe, Timothée, 2014. "Optimum sizing of PV-attached electricity storage according to power market signals – A case study for Germany and Italy," Applied Energy, Elsevier, vol. 127(C), pages 141-155.
    14. McPherson, Madeleine & Tahseen, Samiha, 2018. "Deploying storage assets to facilitate variable renewable energy integration: The impacts of grid flexibility, renewable penetration, and market structure," Energy, Elsevier, vol. 145(C), pages 856-870.
    15. Pena-Bello, A. & Barbour, E. & Gonzalez, M.C. & Patel, M.K. & Parra, D., 2019. "Optimized PV-coupled battery systems for combining applications: Impact of battery technology and geography," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 978-990.
    16. Zafirakis, Dimitrios & Chalvatzis, Konstantinos J. & Baiocchi, Giovanni & Daskalakis, Georgios, 2016. "The value of arbitrage for energy storage: Evidence from European electricity markets," Applied Energy, Elsevier, vol. 184(C), pages 971-986.
    17. Fares, Robert L. & Webber, Michael E., 2014. "A flexible model for economic operational management of grid battery energy storage," Energy, Elsevier, vol. 78(C), pages 768-776.
    18. Meinrenken, Christoph J. & Mehmani, Ali, 2019. "Concurrent optimization of thermal and electric storage in commercial buildings to reduce operating cost and demand peaks under time-of-use tariffs," Applied Energy, Elsevier, vol. 254(C).
    19. Zheng, Qiong & Li, Xianfeng & Cheng, Yuanhui & Ning, Guiling & Xing, Feng & Zhang, Huamin, 2014. "Development and perspective in vanadium flow battery modeling," Applied Energy, Elsevier, vol. 132(C), pages 254-266.
    20. Berrada, Asmae & Loudiyi, Khalid & Zorkani, Izeddine, 2016. "Valuation of energy storage in energy and regulation markets," Energy, Elsevier, vol. 115(P1), pages 1109-1118.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:140:y:2015:i:c:p:395-408. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.