Bidding strategy and economic evaluation of energy storage systems under the time-of-use pricing mechanism

Abstract

Energy storage systems (ESSs) can smooth loads, effectively enable demand-side management, and promote renewable energy consumption. This study developed a two-stage bidding strategy and economic evaluation model for ESS. In the first stage, time-of-use (TOU) pricing model based on the consumer psychology theory and user demand response function is proposed. In the second stage, the benefits and life cycle costs of ESS were measured, and a bidding strategy optimization model was constructed to maximize profit. Subsequently, based on the environmental, social, and governance (ESG) concept, an integrated value model was constructed to evaluate the economics of ESS. Finally, the economics of ESSs were analyzed using the proposed model in a case study. The results indicate the following: (1) The TOU pricing model can effectively reduce the peak-to-valley load difference; (2) The integrated value of ESS is 249,930 yuan, and economic value of ESS is 22,016 yuan in scenarios 1, implying that the ESS has positive externalities under the TOU pricing mechanism; and (3) The net profit and economics of ESS are positively correlated with the rated power of the storage battery and negatively correlated with its rated capacity.