Optimal Sizing of Energy Storage Systems for the Energy Procurement Problem in Multi-Period Markets under Uncertainties

Ryusuke Konishi, Akiko Takeda and Masaki Takahashi
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Ryusuke Konishi: Graduate School of Science and Technology, Keio University, Yokohama 223-8522, Japan
Akiko Takeda: Japan Science and Technology Agency (JST), CREST, Kawaguchi 332-0012, Japan
Masaki Takahashi: Japan Science and Technology Agency (JST), CREST, Kawaguchi 332-0012, Japan

Energies, 2018, vol. 11, issue 1, 1-19

Abstract: In deregulated electricity markets, minimizing the procurement costs of electricity is a critical problem for procurement agencies (PAs). However, uncertainty is inevitable for PAs and includes multiple factors such as market prices, photovoltaic system (PV) output and demand. This study focuses on settlements in multi-period markets (a day-ahead market and a real-time market) and the installation of energy storage systems (ESSs). ESSs can be utilized for time arbitrage in the day-ahead market and to reduce the purchasing/selling of electricity in the real-time market. However, the high costs of an ESS mean the size of the system needs to be minimized. In addition, when determining the size of an ESS, it is important to identify the size appropriate for each role. Therefore, we employ the concept of a “slow” and a “fast” ESS to quantify the size of a system’s role, based on the values associated with the various uncertainties. Because the problem includes nonlinearity and non-convexity, we solve it within a realistic computational burden by reformulating the problem using reasonable assumptions. Therefore, this study identifies the optimal sizes of ESSs and procurement, taking into account the uncertainties of prices in multi-period markets, PV output and demand.

Keywords: energy procurement problem; electricity market; energy storage system; uncertainty; probabilistic approach; scenario-based approach (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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