Abstract
Energy storage offers the flexibility needed to integrate renewable generation into electricity systems. One decentralized option is to install battery packs in homes and offices. Yet storage owners might operate their device autonomously to minimize their own electricity costs, but this could be inefficient from a wider electricity system perspective. Using a novel agent-based power system model, ESMA, we explore the economic trade-offs of aggregator-led (centralized) and consumer-led (decentralized) coordination in the UK over the period 2015–2040. We consider the deployment of storage in the domestic, commercial and industrial sectors.Centralized scheduling leads to the lowest power system cost, reducing mean electricity prices by up to 7% relative to decentralized scheduling. This could avoid annual bill increases of up to 407 £m/year and could decrease electricity price volatility by up to 60%, depending on the installed storage capacity on the grid. We show that aggregators could reduce the disparity between private and system value by financially incentivizing consumers to give up control of their storage resource in order to use it more efficiently for the benefit of the wider electricity system.
Highlights
The proportion of electricity generated from uncontrollable renewables and inflexible nuclear plants is rising rapidly in many countries
We explore the impact of storage aggregation on wholesale electricity prices and their variability (Section 3.2)
As consumers increase their holdings of renewables and energy storage, it will be crucial to ensure that their operation does not increase electricity prices
Summary
The proportion of electricity generated from uncontrollable renewables (wind and solar) and inflexible nuclear plants is rising rapidly in many countries. This increases the need for flexible technologies to ensure electricity security and affordability, and options include flexible generation, energy storage and demand-side response (shifting supply or demand in time), and reinforced networks and interconnections (shifting supply across space). Control of energy storage could be centralized (scheduled by the System Operator) or decentralized (scheduled by the consumer for small, privately owned storage) (Rahbari-Asr et al, 2015). Decentralized resources would charge and discharge without consideration of the wider needs of the electricity system, and the system operator would see only a change in overall demand
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