Feasibility assessment of behind-the-meter batteries under typical tariff structures for commercial and industrial customers

Abstract

This paper presents a comprehensive analysis of cost savings and payback periods for the deployment of batteries by commercial and industrial customers, considering several typical tariff structures in the context of Australia. To achieve this, a battery energy management mechanism is proposed that enables battery charging, both from the solar photovoltaic system and the grid, and discharging precisely to maximize cost savings and minimize payback periods for commercial and industrial customers while minimizing battery degradation. The proposed mechanism directs the battery to charge from the grid during the most economical periods, and grid charging amounts are optimized based on the battery size and demand profiles, and to discharge during demand charge-, peak rate-, and shoulder rate-applicable periods in succession to reap maximum benefits. Furthermore, sensitivity analyses are conducted to showcase the economic viability of battery trial tariffs (tariffs introduced in Australia to expedite the uptake of batteries for commercial and industrial customers) compared to standard tariffs (usual tariffs imposed on commercial and industrial customers in Australia), considering various scenarios such as changes in battery sizes, customer profiles, and coulomb-ratings. The simulation results suggest that the battery trial tariff is more profitable for a sample commercial and industrial customer compared to the standard tariff, enabling the reduction of payback periods by between 1.53% and 38.05%, for example, under the Tariff 1 structure (one example of a tariff structure introduced by a typical service provider in Australia).