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Modeling Storage and Demand Management in Electricity Distribution Grids

Andreas Schröder, Jan Siegmeier and Murk Creusen

No 1110, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Storage devices and demand control may constitute beneficial tools to optimize electricity generation with a large share of intermittent resources through inter-temporal substitution of load. We quantify the related cost reductions in a simulation model of a simplified stylized medium-voltage grid (10kV) under uncertain demand and wind output. Benders Decomposition Method is applied to create a two-stage stochastic program. The model informs an optimal investment sizing decision as regards specific 'smart grid' applications such as storage facilities and meters enabling load control. Model results indicate that central storage facilities are a more promising option for generation cost reductions as compared to demand management. Grid extensions are not appropriate in any of our scenarios. A sensitivity analysis is applied with respect to the market penetration of uncoordinated Plug-In Electric Vehicles which are found to strongly encourage investment into load control equipment for `smart` charging and slightly improve the case for central storage devices.

Keywords: Storage; demand management; stochastic optimization; Benders Decomposition (search for similar items in EconPapers)
JEL-codes: Q40 Q41 (search for similar items in EconPapers)
Pages: 16 p.
Date: 2011
New Economics Papers: this item is included in nep-cmp and nep-ene
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