Bankruptcy problem in energy warehouse: Applications and challenges

Abstract

Green smart cities that rely completely on sustainable renewable energy sources are being constructed to attract investors, diversify countries’ economies, and move away from dependence on fossil fuels. The main renewable energy sources used in such cities today include solar, wind, and—to a lesser extent—biomass. However, these sources are stochastic in nature, and the amount of energy they produce is not entirely controllable. This results in difficulty maintaining the balance between generation and demand in the power grid. Recent technological advances in smart grids, microgrids, virtual power plants, energy hubs, and energy interconnection technologies offer a wide range of plausible solutions to this problem. Such advances motivated the development of a complementary technology known as the energy warehouse (EW). An EW is a controlled and managed heterogeneous massive modular energy storage and wheeling system. It provides links between microgrids and bulk power systems (BPSs). After describing the structure of an EW and its energy management system and illustrating example EW operating scenarios, this paper uses the concept of bankruptcy to explain the business side of an EW. For the first time, this principle is used to address cases where the EW falls short of its obligations to the connected microgrids and BPSs. This treatment of EW contributes to a better understanding of its operation and opens further opportunities for contributions. Furthermore, our study confirms that a properly sized and located EW promises significant technical and economic benefits. These including load leveling and energy time-shift, as well as the potential to eliminate the typical transmission infrastructure, thereby reducing losses, mitigating congestion, and increasing efficiency.