Optimal Allocation of Energy Storage System for Risk Mitigation of DISCOs With High Renewable Penetrations

TLDR

Increasing renewable penetration alters distribution power flow direction and magnitude, making reliable on‑demand delivery a major challenge. The study proposes a BESS‑based energy acquisition model and a battery operation strategy to help DISCOs regulate price or LMP mechanisms and mitigate operational risk from price volatility. Optimal BESS sizing and siting are determined via cost‑benefit analysis, and the model and strategy are validated on a modified IEEE 15‑bus network with risk mitigation quantified in two markets. The results show that ESS capacity requirements can be reduced while operational risk is also mitigated.

Abstract

Along with the increasing penetration of renewable energy, distribution system power flow may be significantly altered in terms of direction and magnitude. This will make delivering reliable power, on demand, a major challenge. In this paper, a novel battery energy storage system (BESS) based energy acquisition model is proposed for the operation of distribution companies (DISCOs) in regulating price or locational marginal price (LMP) mechanisms, while considering energy provision options within DISCO controlled areas. Based on this new model, a new battery operation strategy is proposed for better utilization of energy storage system (ESS) and mitigation operational risk from price volatility. Meanwhile, optimal sizing and siting decisions for BESS is obtained through a cost-benefit analysis method, which aims at maximizing the DISCO's profit from energy transactions, system planning and operation cost savings. The proposed energy acquisition model and ESS control strategy are verified on a modified IEEE 15-bus distribution network, and risk mitigation is also quantified in two different markets. The promising results show that the capacity requirement for ESS can be reduced and the operational risk can also be mitigated.