Centralized Energy Storage System (CESS) Coordination
Consumers without onsite energy technologies can benefit from central coordination of storage. However, the scale of private annual electricity cost savings depends on future energy system evolutions and scheduling coordination regimes.
Private benefits from centralized EES aggregation tend Centralized Energy Storage System to increase with the ratio of variable renewable generation capacity in the system to the level of flexible supply capacity. This is in contrast to distributed coordination, where savings decline with the amount of aggregation.
Benefits
Energy storage is a key component for enabling renewables, providing backup power during disruptions, and helping the grid stabilize. However, state legislatures must address numerous barriers to adoption and use of this technology. This primer offers state lawmakers a guide to understanding the value of energy storage and its benefits to the grid.
A key benefit of centralized coordination is that it reduces electricity prices in the system by improving the balancing of load and flexibility resources. This decrease in peak electricity prices translates into savings for all consumers, including those without their own onsite energy technologies. These savings depend on the type of aggregation model used and the evolution of the power system, and it is important to make this distinction when evaluating energy storage systems.
To illustrate the impact of different aggregation models, this study compares uncoordinated operation of residential PV-battery systems with centrally coordinated operations using time-of-use (ToU) tariffs. The results show that the herding behaviour of the EES owners results in a reduction in their private annual costs by herding to charge at the same times of day, but this is compensated for by the ability of the aggregator to reduce peak electricity prices in the system through herding and arbitrage. As the amount of aggregated home batteries increases, the private annual savings decline, and aggregation is unlikely to provide significant economic benefits to consumers with PV-battery systems.
Costs
Centralized coordination allows the electricity system operator to optimize EES capacity and dispatch it as needed to improve balancing and reduce electricity prices. It also increases the value of storage to consumers, especially under time-of-use tariffs. However, there are significant transaction costs associated with aggregation that must be taken into account when analyzing the benefits of energy storage.
In this study, we determine the impact of electricity market design and scheduling on energy storage economics for a typical UK household using PV-battery systems. We use a hybrid methodology that integrates a consumer-level model of PV and battery operation with a whole-system power system model to account for long-term energy transitions. We investigate two cases: distributed coordination whereby the flexibility of EES is autonomously optimized by consumers and centralized coordination in which an aggregator coordinates the flexible operation of EES and offers a range of services to the grid, such as operational flexibility and peak shaving.
We compare the life cycle cost of two control options in order to smooth the output of a Direct Wave Energy Converter (DWEC) farm and meet the flicker constraint. The first option is a distributed control that optimizes the ESS size to minimize aging speed and the second one is a centralized control that manages a group of smaller ESS to optimize their power conversion.
Integration
Energy storage systems are a flexible resource that can be integrated into electricity system operations. They can either be operated independently to smoothen their own demand profiles and exploit arbitrage benefits, or they can be centrally coordinated through an aggregator to participate in the wholesale market. The results of comparing these two scenarios are shown in Figure 1. The main characteristics of uncoordinated (a) and centrally coordinated (b) operation are represented by the main curves in each graph, with system benefits increasing inversely with the flexibility of the EES. Consumer benefits also increase with the level of flexible resources deployed.
Coordination
The coordination of operations within a CESS is an important factor for the efficiency of Centralized Energy Storage System the system. It allows the system operator to utilize demand-side flexibility to balance the energy supply in the power system. This balancing effect reduces peak electricity prices, which benefits all consumers, including those who do not have distributed energy technologies. It also minimizes the need for additional investments in balancing capacity and power plants. This is why it is essential to coordinate the operations of distributed storage in a CESS.
The centralized coordination of storage capacity in the power system offers higher electricity bill savings for the consumer than distributed scheduling, which increases the annual electricity costs by between 4 and 8% when operating no technology, or 3-11% with home batteries. This is due to the fact that the centralized coordination of EES allows for greater utilization of flexibility in the grid, leading to lower electricity prices in the market and less demand for expensive peaking plants.
In addition, centralizing the operation of home batteries increases their value to consumers as a source of flexibility in the energy system. However, the impact of aggregation on electricity prices will depend on the ratio of variable renewable capacity to flexible supply capacity. In a high-renewable, inflexible system, the flexibility of home batteries may be more valuable if the system operator can use it to compensate for intermittent generation.