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Smart energy storage management via information systems design

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  • He, Qiao-Chu
  • Yang, Yun
  • Bai, Lingquan
  • Zhang, Baosen

Abstract

Enabled by smart meters and Internet of Things (IoTs) technologies, we are now able to harness information systems and automatize the management of energy storages. Motivated by applications such as renewables integration and electrification of transportation, the paradigm shift towards smart-cities naturally inspires information systems design for energy storages. The goal of this paper is to understand the economic value of future market information to increase the efficiency of the energy market. From storages’ perspective, we investigate energy storages’ optimal decentralized buying and selling decisions under market uncertainty. Different potential policy interventions are discussed: (1) providing a publicly available market forecasting channel; (2) encouraging decentralized storages to share their private forecasts with each other; (3) releasing additional market information to a targeted subset of storages exclusively. Through these system level discussions, we evaluate different information management policies to coordinate storages’ actions and improve their profitability. The key findings of this work include (1) a storage's payoff first increases then decreases in its private information precision. The over-precision in forecasts can lead to even lower payoffs; (2) communication among the storages could fail to achieve a coordinated effort to increase market efficiency; (3) it is optimal to release additional information to a subset of energy storages exclusively by targeted information release.

Suggested Citation

  • He, Qiao-Chu & Yang, Yun & Bai, Lingquan & Zhang, Baosen, 2020. "Smart energy storage management via information systems design," Energy Economics, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:eneeco:v:85:y:2020:i:c:s0140988319303378
    DOI: 10.1016/j.eneco.2019.104542
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    2. Serhii Voitko & Olena Trofymenko, 2021. "Development of methodological foundations for the development of energy in Industry 4.0 in part of game theory and blockchain," Technology audit and production reserves, Socionet;Technology audit and production reserves, vol. 2(4(58)), pages 20-23.
    3. Zhang, Han & Wang, Liang & Lin, Xipeng & Chen, Haisheng, 2022. "Technical and economic analysis of Brayton-cycle-based pumped thermal electricity storage systems with direct and indirect thermal energy storage," Energy, Elsevier, vol. 239(PC).

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    More about this item

    Keywords

    Energy storages; Management information systems; Smart-cities; Internet of Things (IoTs); Game with incomplete information;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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