Concepedia

Optimal Control of End-User Energy Storage

Peter M. van de Ven, Nidhi Hegde, Laurent Massoulié, Theodoros Salonidis

IEEE Transactions on Smart Grid · 2013 · 179 citations · 17 references

Open access

TL;DR

Retail energy markets increasingly exhibit price fluctuations, giving users the chance to purchase energy at below‑average prices. The study aims to develop a battery control policy that minimizes discounted energy costs by storing low‑price energy for use during high‑price periods and demonstrates the resulting savings. The authors model a battery storage system and formulate an optimal control policy that charges during low‑price periods and discharges during high‑price periods to minimize total discounted costs. The optimal policy has a threshold structure with analytically derived thresholds in special cases, and numerical experiments confirm significant cost savings from energy storage.

Abstract

An increasing number of retail energy markets show price fluctuations, providing users with the opportunity to buy energy at lower than average prices. We propose to temporarily store this inexpensive energy in a battery, and use it to satisfy demand when energy prices are high, thus allowing users to exploit the price variations without having to shift their demand to the low-price periods. We study the battery control policy that yields the best performance, i.e., minimizes the total discounted costs. The optimal policy is shown to have a threshold structure, and we derive these thresholds in a few special cases. The cost savings obtained from energy storage are demonstrated through extensive numerical experiments, and we offer various directions for future research.