skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: Economic Analysis and Optimal Sizing for behind-the-meter Battery Storage

Abstract

This paper proposes methods to estimate the potential benefits and determine the optimal energy and power capacity for behind-the-meter BSS. In the proposed method, a linear programming is first formulated only using typical load profiles, energy/demand charge rates, and a set of battery parameters to determine the maximum saving in electric energy cost. The optimization formulation is then adapted to include battery cost as a function of its power and energy capacity in order to capture the trade-off between benefits and cost, and therefore to determine the most economic battery size. Using the proposed methods, economic analysis and optimal sizing have been performed for a few commercial buildings and utility rate structures that are representative of those found in the various regions of the Continental United States. The key factors that affect the economic benefits and optimal size have been identified. The proposed methods and case study results cannot only help commercial and industrial customers or battery vendors to evaluate and size the storage system for behind-the-meter application, but can also assist utilities and policy makers to design electricity rate or subsidies to promote the development of energy storage.

Authors:
; ; ;
Publication Date:
Research Org.:
Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
Sponsoring Org.:
USDOE
OSTI Identifier:
1339051
Report Number(s):
PNNL-SA-114067
DOE Contract Number:
AC05-76RL01830
Resource Type:
Conference
Resource Relation:
Conference: 2016 IEEE Power and Energy Society General Meeting, July 17-21, 2016, Boston, Massachusetts, 1-5
Country of Publication:
United States
Language:
English

Citation Formats

Wu, Di, Kintner-Meyer, Michael CW, Yang, Tao, and Balducci, Patrick J. Economic Analysis and Optimal Sizing for behind-the-meter Battery Storage. United States: N. p., 2016. Web. doi:10.1109/PESGM.2016.7741210.
Wu, Di, Kintner-Meyer, Michael CW, Yang, Tao, & Balducci, Patrick J. Economic Analysis and Optimal Sizing for behind-the-meter Battery Storage. United States. doi:10.1109/PESGM.2016.7741210.
Wu, Di, Kintner-Meyer, Michael CW, Yang, Tao, and Balducci, Patrick J. 2016. "Economic Analysis and Optimal Sizing for behind-the-meter Battery Storage". United States. doi:10.1109/PESGM.2016.7741210.
@article{osti_1339051,
title = {Economic Analysis and Optimal Sizing for behind-the-meter Battery Storage},
author = {Wu, Di and Kintner-Meyer, Michael CW and Yang, Tao and Balducci, Patrick J.},
abstractNote = {This paper proposes methods to estimate the potential benefits and determine the optimal energy and power capacity for behind-the-meter BSS. In the proposed method, a linear programming is first formulated only using typical load profiles, energy/demand charge rates, and a set of battery parameters to determine the maximum saving in electric energy cost. The optimization formulation is then adapted to include battery cost as a function of its power and energy capacity in order to capture the trade-off between benefits and cost, and therefore to determine the most economic battery size. Using the proposed methods, economic analysis and optimal sizing have been performed for a few commercial buildings and utility rate structures that are representative of those found in the various regions of the Continental United States. The key factors that affect the economic benefits and optimal size have been identified. The proposed methods and case study results cannot only help commercial and industrial customers or battery vendors to evaluate and size the storage system for behind-the-meter application, but can also assist utilities and policy makers to design electricity rate or subsidies to promote the development of energy storage.},
doi = {10.1109/PESGM.2016.7741210},
journal = {},
number = ,
volume = ,
place = {United States},
year = 2016,
month = 7
}

Conference:
Other availability
Please see Document Availability for additional information on obtaining the full-text document. Library patrons may search WorldCat to identify libraries that hold this conference proceeding.

Save / Share:
  • In behind-the-meter application, battery storage system (BSS) is utilized to reduce a commercial or industrial customer’s payment for electricity use, including energy charge and demand charge. The potential value of BSS in payment reduction and the most economic size can be determined by formulating and solving standard mathematical programming problems. In this method, users input system information such as load profiles, energy/demand charge rates, and battery characteristics to construct a standard programming problem that typically involve a large number of constraints and decision variables. Such a large scale programming problem is then solved by optimization solvers to obtain numerical solutions.more » Such a method cannot directly link the obtained optimal battery sizes to input parameters and requires case-by-case analysis. In this paper, we present an objective quantitative analysis of costs and benefits of customer-side energy storage, and thereby identify key factors that affect battery sizing. Based on the analysis, we then develop simple but effective guidelines that can be used to determine the most cost-effective battery size or guide utility rate design for stimulating energy storage development. The proposed analytical sizing methods are innovative, and offer engineering insights on how the optimal battery size varies with system characteristics. We illustrate the proposed methods using practical building load profile and utility rate. The obtained results are compared with the ones using mathematical programming based methods for validation.« less
  • This paper proposes a new strategy to achieve voltage regulation in distributed power systems in the presence of solar energy sources and battery storage systems. The goal is to find the minimum size of battery storage and its corresponding location in the network based on the size and place of the integrated solar generation. The proposed method formulates the problem by employing the network impedance matrix to obtain an analytical solution instead of using a recursive algorithm such as power flow. The required modifications for modeling the slack and PV buses (generator buses) are utilized to increase the accuracy ofmore » the approach. The use of reactive power control to regulate the voltage regulation is not always an optimal solution as in distribution systems R/X is large. In this paper the minimum size and the best place of battery storage is achieved by optimizing the amount of both active and reactive power exchanged by battery storage and its gridtie inverter (GTI) based on the network topology and R/X ratios in the distribution system. Simulation results for the IEEE 14-bus system verify the effectiveness of the proposed approach.« less
  • In the first phase of this project, the technical and economic feasibility of using current technology battery storage systems was indicated for certain generic applications within a range of favorable system characteristics. This report presents the results of the second phase in which specific customer applications were identified and analyzed for economic viability. A large number of actual utility customer load profiles were screened in a search for viable applications. Sixteen profiles (representing 15 customers) were selected for a detailed economic analysis. A financial simulation model was developed in order to carry out a credible financial investment analysis and presentmore » analysis results in a form suitable for use by corporate and institutional financial planners. The model was used to perform detailed economic analyses of 16 customer applications. The economic analysis took into account actual cost data and utility rate structures, realistic operating scenarios, and different battery system sizes.« less
  • In the first phase of this project, the technical and economic feasibility of using current technology battery storage systems was indicated for certain generic applications within a range of favorable system characteristics. This report presents the results of the second phase in which specific customer applications were identified and analyzed for economic viability. A large number of actual utility customer load profiles were screened in a search for viable applications. Sixteen profiles (representing 15 customers) were selected for a detailed economic analysis. A financial simulation model was developed in order to carry out a credible financial investment analysis and presentmore » analysis results in a form suitable for use by corporate and institutional financial planners. The model was used to perform detailed economic analyses of 16 customer applications. The economic analysis took into account actual cost data and utility rate structures, realistic operating scenarios, and different battery system sizes.« less
  • A customer-side-of-the-meter (CSOM) storage battery load-leveling facility was analyzed using a risk-adjusted approach to the capital budgeting decision. This report presents a capital budgeting methodology that is more theoretically correct and technically elegant than other methods. It was concluded that the textile manufacturer's CSOM investment project is riskier than originally thought.