System benefits of industrial battery storage: A comparison of grid and facility control and dispatch

Abstract

Customer-owned, distributed battery installations are being incentivized by utilities to increase installed battery capacity. In many of these incentive agreements, the battery owner relinquishes battery control to the utility in exchange for incentive money. The industrial sector has lagged in storage installation when compared to the residential and commercial sectors. This study compares the economic advantages to utilities and industrial facilities in different dispatch control situations. The study presents a novel framework for the optimization of multiple systems using load profiles from the industrial, residential, and commercial sectors. Case studies are presented to illustrate different dispatch scenarios. The simulations showed more fiscal benefit for the industrial facilities to dispatch the battery for electrical demand reduction than utility dispatch. In the case studies, facility dispatch control resulted in an increase of facility savings by a factor of about 8.7 when compared to utility dispatch. Battery size plays a significant factor on the impact of the grid’s generating costs, showing that larger batteries can provide significant benefit even if dispatched by the facility. Future policies concerning industrial battery installations should consider overall economic benefits to utility and facility in the form of rate structures and incentive participation based on battery size. • Battery storage lags in the industrial sector from lack of beneficial policy. • Most industrial battery incentives require relinquishing dispatch control to grid. • Fiscal benefits of facility dispatch tend to outweigh grid dispatch benefits. • Case studies outline the need of industrial-specific storage incentives and policy.