Charging Incentive Design with Minimum Price Guarantee for Battery Energy Storage Systems to Mitigate Grid Congestion

Yujiro Tanno (), Akihisa Kaneko, Yu Fujimoto, Yasuhiro Hayashi, Yuji Hanai and Hideo Koseki
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Yujiro Tanno: Department of Electrical Engineering and Bioscience, Waseda University, Tokyo 169-8555, Japan
Akihisa Kaneko: Advanced Collaborative Research Organization for Smart Society, Waseda University, Tokyo 169-8555, Japan
Yu Fujimoto: Advanced Collaborative Research Organization for Smart Society, Waseda University, Tokyo 169-8555, Japan
Yasuhiro Hayashi: Department of Electrical Engineering and Bioscience, Waseda University, Tokyo 169-8555, Japan
Yuji Hanai: Grid Innovation Research Laboratory, Central Research Institute of Power Industry, Yokosuka 240-0196, Japan
Hideo Koseki: Grid Innovation Research Laboratory, Central Research Institute of Power Industry, Yokosuka 240-0196, Japan

Energies, 2025, vol. 18, issue 11, 1-23

Abstract: The large-scale integration of renewable energy sources (RESs) has raised concerns regarding grid congestion in Japan. Battery energy storage systems (BESSs) can mitigate congestion by adjusting charging schedules; however, BESS owners basically prioritize market arbitrage, which may not be aligned with congestion mitigation. This paper proposes a charging incentive design to guide arbitrage-oriented BESS charging toward time periods that are effective for grid congestion mitigation. The system operator predicts congested hours and ensures that BESS owners can purchase electricity at the lowest daily market price. This design intends to shift the BESS charging time towards congestion periods. Because market prices tend to decline during congestion periods, the proposed method reduces the operator’s financial burden while encouraging congestion-mitigating charging behavior. Numerical simulations using a simplified Japanese east-side power system model demonstrate that the proposed method reduced the congestion mitigation costs by 3.86% and curtailed the RES output by 3.89%, compared to using no incentive method (current operation in Japan). Furthermore, additional payments to BESS owners accounted for only around 7% of the resulting cost savings, indicating that the proposed method achieved lower overall system operating costs.

Keywords: battery energy storage system; grid congestion; charging incentive (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: 2025
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