Non-Strategic Capacity Withholding from Distributed Energy Storage within Microgrids Providing Energy and Reserve Services

Fernando J. Lanas, Francisco J. Martínez-Conde, Diego Alvarado, Rodrigo Moreno, Patricio Mendoza-Araya and Guillermo Jiménez-Estévez
Additional contact information
Fernando J. Lanas: Department of Electrical Engineering, Universidad de Chile, Av. Tupper 2007, Santiago 8370451, Chile
Francisco J. Martínez-Conde: Department of Electrical Engineering, Universidad de Chile, Av. Tupper 2007, Santiago 8370451, Chile
Diego Alvarado: Instituto Sistemas Complejos de Ingeniería (ISCI), Beauchef 851, Santiago 8370456, Chile
Rodrigo Moreno: Department of Electrical Engineering, Universidad de Chile, Av. Tupper 2007, Santiago 8370451, Chile
Patricio Mendoza-Araya: Department of Electrical Engineering, Universidad de Chile, Av. Tupper 2007, Santiago 8370451, Chile
Guillermo Jiménez-Estévez: Energy Center FCFM, Universidad de Chile, Plaza Ercilla 847, Santiago 8370450, Chile

Energies, 2020, vol. 13, issue 19, 1-14

Abstract: Microgrids have the potential to provide security and flexibility to power systems through the integration of a wide range of resources, including distributed energy storage, usually in the form of batteries. An aggregation of microgrids can enable the participation of these resources in the main system’s energy and ancillary services market. The traditional minimum-cost operation, however, can undermine microgrid’s ability to hold reserve capacity for operation in islanded mode and can rapidly degrade distributed batteries. This paper studies the impacts of various operational strategies from distributed energy storage plants on their revenues and on market prices, considering an array of microgrids that act in a synchronized fashion. The operational model minimizes the entire electric power system cost, considering transmission-connected and distributed energy resources, and capturing capacity degradation of batteries as part of the cost function. Additionally, microgrid-based, distributed batteries can provide energy arbitrage and both system-level and microgrid-level security services. Through several case studies, we demonstrate the economic impacts of distributed energy storage providing these services, including also capacity degradation. We also demonstrate the benefits of providing reserve services in terms of extra revenue and battery lifespan. Finally, we conclude that limitations in the provision of system-level services from distributed batteries due to degradation considerations and higher microgrid-level security requirements may, counterintuitively, increase system-level revenues for storage owners, if such degradation considerations and microgrid-level security requirements are adopted, at once, by a large number of microgrids, leading to unintended, non-strategic capacity withholding by distributed storage owners.

Keywords: battery energy storage systems; microgrids; capacity withholding; capacity degradation; power system economics; power system reliability; ancillary services (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: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1996-1073/13/19/5235/pdf (application/pdf)
https://www.mdpi.com/1996-1073/13/19/5235/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:13:y:2020:i:19:p:5235-:d:425000

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().