Optimal energy storage system design for addressing uncertainty issues in integration of supply and demand-side management approaches

Abstract

The primary goal of Sustainable Development Goal 7 (SDG 7) is to increase renewable energy use to reduce reliance on fossil fuels and mitigate climate change. Energy-intensive industries can benefit from in-house renewable power generation, reducing their reliance on fossil fuel-based grid power and making processes greener. However, integration among power generation/purchase, energy storage systems (ESS), and power consumption is crucial to overcome the intermittent nature of renewable power sources. ESS plays a vital role in increasing resilience and optimizing material production based on power availability and pricing. The efficacy of ESS needs critical evaluation considering cost, efficiency, and uncertainties related to renewable power generation and material product demand. The paper proposes two scenario-based optimization approaches to assess the impact of uncertainties on the integrated supply and demand side management (ISDM) system, focusing on lithium-ion batteries and cryogenic energy storage (CES). Compared to the conservative approach of the scenario-based robust optimization (SRO) method, the proposed stochastic simulation optimization (SSO) method provides a ‘risk-neutral’ solution, which is 6.45% less than the minimum expected cost solution. The analysis also suggests that lithium-ion batteries are more economically effective for the proposed integrated framework than CES, resulting in almost a 29% reduction in operating costs compared to no battery option. The proposed framework could contribute to sustainable and economically viable energy management practices in energy-intensive industries. Further research and implementation of such frameworks could accelerate the adoption of renewable energy and energy storage technologies in industrial processes.