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Energies 2016, 9(1), 12; doi:10.3390/en9010012

A Simple Operating Strategy of Small-Scale Battery Energy Storages for Energy Arbitrage under Dynamic Pricing Tariffs

Department of Energy, Information Engineering and Mathematical Models, University of Palermo, Viale delle Scienze, 90128, Palermo, Italy
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Academic Editor: William Holderbaum
Received: 9 October 2015 / Revised: 4 December 2015 / Accepted: 16 December 2015 / Published: 25 December 2015
(This article belongs to the Special Issue Control of Energy Storage)
View Full-Text   |   Download PDF [1558 KB, uploaded 25 December 2015]   |  

Abstract

Price arbitrage involves taking advantage of an electricity price difference, storing electricity during low-prices times, and selling it back to the grid during high-prices periods. This strategy can be exploited by customers in presence of dynamic pricing schemes, such as hourly electricity prices, where the customer electricity cost may vary at any hour of day, and power consumption can be managed in a more flexible and economical manner, taking advantage of the price differential. Instead of modifying their energy consumption, customers can install storage systems to reduce their electricity bill, shifting the energy consumption from on-peak to off-peak hours. This paper develops a detailed storage model linking together technical, economic and electricity market parameters. The proposed operating strategy aims to maximize the profit of the storage owner (electricity customer) under simplifying assumptions, by determining the optimal charge/discharge schedule. The model can be applied to several kinds of storages, although the simulations refer to three kinds of batteries: lead-acid, lithium-ion (Li-ion) and sodium-sulfur (NaS) batteries. Unlike literature reviews, often requiring an estimate of the end-user load profile, the proposed operation strategy is able to properly identify the battery-charging schedule, relying only on the hourly price profile, regardless of the specific facility’s consumption, thanks to some simplifying assumptions in the sizing and the operation of the battery. This could be particularly useful when the customer load profile cannot be scheduled with sufficient reliability, because of the uncertainty inherent in load forecasting. The motivation behind this research is that storage devices can help to lower the average electricity prices, increasing flexibility and fostering the integration of renewable sources into the power system. View Full-Text
Keywords: price arbitrage; battery energy storage system; optimal operation; hourly electricity prices; energy management price arbitrage; battery energy storage system; optimal operation; hourly electricity prices; energy management
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Telaretti, E.; Ippolito, M.; Dusonchet, L. A Simple Operating Strategy of Small-Scale Battery Energy Storages for Energy Arbitrage under Dynamic Pricing Tariffs. Energies 2016, 9, 12.

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