Feasibility Analysis of Behind-the-Meter Energy Storage System According to Public Policy on an Electricity Charge Discount Program

Byuk-Keun Jo, Seungmin Jung and Gilsoo Jang
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Byuk-Keun Jo: School of Electrical Engineering, Korea University, Anam Campus, 145 Anam-ro, Seongbuk-gu, Seoul 02841, Korea
Seungmin Jung: Department of Electrical Engineering, Hanbat National University, 125 Dongseo-daero, Yuseong-gu, Daejeon 34158, Korea
Gilsoo Jang: School of Electrical Engineering, Korea University, Anam Campus, 145 Anam-ro, Seongbuk-gu, Seoul 02841, Korea

Sustainability, 2019, vol. 11, issue 1, 1-17

Abstract: Energy storage systems are crucial in dealing with challenges from the high-level penetration of renewable energy, which has inherently intermittent characteristics. For this reason, various incentive schemes improving the economic profitability of energy storage systems are underway in many countries with an aim to expand the participation rate. The electricity charge discount program, which was introduced in 2015 in Korea, is one of the policies meant to support the economic feasibility of demand-side energy storage systems. This paper quantitatively evaluated the impact of the electricity charge discount program on the economic feasibility of behind-the-meter energy storage systems. In this work, we first summarized how electricity customers can benefit from behind-the-meter energy storage systems. In addition, we represented details of the structure that make up the electricity charge discount program, i.e., how the electricity charge is discounted through the discount scheme. An optimization problem that establishes a charge and discharge schedule of an energy storage system to minimize each consumer’s electricity expenditure was defined and formulated as well. The case study results indicated that the electricity charge discount program has improved the profitability of behind-the-meter energy storage systems, and this improved profitability led to investment in behind-the-meter energy storage systems in Korea. As a result of the electricity charge discount program, Korea’s domestic demand side energy storage system market size, which was only 27 billion dollars in 2015 in Korea, has grown to 825 billion dollars in 2018.

Keywords: energy storage system; electricity charge discount program; peak reduction; economic feasibility analysis; policy effectiveness evaluation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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