Centralized Energy Storage System
Consumers should be provided with data on the amount of onsite energy storage that is centrally coordinated and aggregated in the electricity system. This could improve their confidence in investing in storage and facilitate deployments.
Centralized scheduling of EES results in higher electricity bill savings for consumers compared to distributed coordination. Savings increase with the ratio between variable renewable capacity and flexible supply capacity in the power system.
Benefits
Energy storage is a promising technology that can provide numerous benefits to the electricity system. It can increase resiliency, provide backup power during power outages, reduce transmission infrastructure costs, and enable renewable integration. However, the cost of energy storage is high and the technology has not yet been widely adopted. This is partly due to the lack of state-level policies and regulations that support it. As a result, many consumers are reluctant to invest in EES because of the low return on their investment.
This study aims to understand the impact of the way energy storage is managed on private consumer savings. It investigates the difference between centralized and distributed coordination of home batteries, and compares annual electricity cost savings for a typical electricity consumer in the UK. It finds that centralized coordination increases the benefit of storage to the electricity system through arbitrage and minimizes the gap between on-peak and off-peak prices. However, aggregating storage capacity reduces the electricity price savings to consumers. This is because herding behaviour could lead to consumers reducing their electricity consumption to maximize their own electricity bill savings, thereby limiting the overall system benefits of storage.
The results also show that centralized coordination of PV-EES improves annual savings for consumers with and without onsite energy technologies. The study recommends that the regulator should reward prosumers with PV-EES to allow aggregators to coordinate their resources, and Centralized Energy Storage System to ensure that the electricity prices optimize the benefits of centralized coordination.
Costs
The costs of using a centralized energy storage system vary depending on the size of the system and the type of energy stored. In addition, the system can be costly to maintain and operate. However, these costs will decrease as the technology becomes more widespread and the price of batteries drops.
A centralized energy storage system offers benefits to consumers and prosumers that cannot be obtained with distributed systems, such as grid flexibility. It also reduces the need for conventional fossil fuel power generation, which is expensive and polluting. Moreover, the system can improve the efficiency of the electricity distribution network and increase self-consumption from rooftop solar.
According to the Project Drawdown research, the centralized coordination of EES in the electricity system reduces annual electricity bills by 8-11% in Gone Green and 4-5% in Slow Progression. This is due to the ability of EES to lower wholesale electricity prices through arbitrage, which reduces overall electricity system costs. In contrast, distributed coordination leads to lower annual electricity bill savings, owing to the less effective integration of EES in the system through scheduling.
Despite the high upfront investment costs of small-scale residential electricity storage, the benefits for consumers and prosumers are expected to exceed these initial investments within the next few years. The Project Drawdown research investigates the potential impact of these technologies on electricity cost savings for consumers and prosumers in both centralized and distributed coordination models. In the centralized model, an aggregator schedules the EES of consumers through iterative negotiations. The transaction costs associated with aggregation are neglected.
Risks
Many consumers are unsure how much savings they can expect from their energy storage investments. In order to reduce this uncertainty, it is important that the system operator communicates with consumers about how the system will operate. This information can help consumers decide whether investing in storage is financially beneficial for them. Ideally, this would be done through software integrated into an easily accessible website that calculates savings from storage based on high temporal and spatial resolution models of the electricity system.
The system operator can also use this information to inform aggregators and PV utilities about the amount of storage capacity in the system and how much of it is expected to be coordinated. Providing this information could improve consumer confidence in the technology and encourage further deployments. However, this approach is unlikely to work unless the system operator can nudge consumers into sharing their energy consumption data.
This analysis compares the impact of centralized and distributed coordination on EES scheduling. Centralized coordination reflects the current arrangements in which large-scale EES technologies are operated in the electricity market, with aggregators iteratively negotiating with consumers whose resources they do not own to coordinate their dispatch. It ignores transaction costs associated with aggregation, while the distributed coordination case is motivated by consumers who want to maximize their own annual electricity cost savings.
Integration
Unlike DESS, CESS is centrally controlled by an energy storage operator Centralized Energy Storage System and can communicate with the local electricity market directly. It is a great solution for prosumers who are interested in participating in the local electricity market but are not able to install their own DESS because of space and cost constraints.
The system integration process for centralized shared energy storage involves two main strategies: distributed coordination and centralized coordination. In the former, consumers schedule their EES independently for their private benefits, ignoring the potential system-level benefit of aggregation. The latter uses an aggregator to optimize the scheduling of small EES systems for the benefit of the community energy system.
To maximize the utilization of flexible resources in a resilience microgrid, we propose a bi-level optimization model that takes the maximum net income of centralized shared energy storage as the upper layer and the minimum payment cost of load in the resilience microgrid as the lower layer. This model can help optimize the centralized shared energy storage capacity of a resilient microgrid and provide the optimal response characteristics for different scenarios.