Optimal Control of End-User Energy Storage

An increasing number of retail energy markets show price fluctuations, providing users with the opportunity to buy energy at lower than average prices. We propose to temporarily store this inexpensive energy in a battery, and use it to satisfy demand when energy prices are high, thus allowing users...

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Bibliographic Details
Published inIEEE transactions on smart grid Vol. 4; no. 2; pp. 789 - 797
Main Authors van de Ven, P. M., Hegde, N., Massoulie, L., Salonidis, T.
Format Journal Article
LanguageEnglish
Published IEEE 01.06.2013
Institute of Electrical and Electronics Engineers
Subjects
Batteries
Battery storage
Computer Science
Discharges (electric)
dynamic pricing
dynamic programming
energy storage
Markov decision processes
Mathematical model
Networking and Internet Architecture
Optimal control
Optimization
Pricing
threshold policy
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Summary:An increasing number of retail energy markets show price fluctuations, providing users with the opportunity to buy energy at lower than average prices. We propose to temporarily store this inexpensive energy in a battery, and use it to satisfy demand when energy prices are high, thus allowing users to exploit the price variations without having to shift their demand to the low-price periods. We study the battery control policy that yields the best performance, i.e., minimizes the total discounted costs. The optimal policy is shown to have a threshold structure, and we derive these thresholds in a few special cases. The cost savings obtained from energy storage are demonstrated through extensive numerical experiments, and we offer various directions for future research.
ISSN:1949-3053
1949-3061
DOI:10.1109/TSG.2012.2232943