On Evaluation of Onsite Energy Storage for Various End-Use Facilities with Utility Bill Management, Arbitrage, and Frequency Regulation Opportunities

This paper proposes a comprehensive evaluating framework that enables facility operators to optimally size and dispatch their onsite energy storage systems (ESS) that might be operated as either standalone or integrated solar-plus-storage systems. The proposed model is developed on an energy procurement-based model with a mixed-integer linear programming (MILP) format, wherein the potential energy and demand charge savings though utility bill management (UBM) and revenue streams from energy arbitrage and frequency regulation (FR) opportunities are co-optimized. PJM's pay-for-performance regulation market is considered to remunerate the facility's dedicated capacities to the FR market. To investigate the impacts of facility behavior on the evaluation of various onsite ESSs, a set of 24 facilities from different end-use sectors with different functionalities are simulated. The practicality of the proposed evaluation model is then investigated through two case studies where the impacts of various optimally-operated onsite ESSs on maximizing the potential benefits are quantified.

I. Introduction

THE continuing growth of distributed energy resources (DERs) utilization, particularly renewable energy sources (RESs) such as wind and solar PV power generations, have engendered new operational challenges for the power system operators due to their highly variable generation. Additionally, the burgeoning electric vehicle (EV) ownership might inject similar variability when consumers decide to charge their EVs, drawing significant power from the grid at uncertain times. The consequent abrupt changes in net-demand might cause ramping scarcity in balancing supply and demand; thereby, fast-ramping resources such as energy storage systems (ESS) are essential to maintain the grid reliability [1]. Regulation markets have been designed to facilitate the participation of fast-responding resources where Federal Energy Regulatory Commission (FERC) Order 755 directs independent system operators (ISO) and regional transmission organizations (RTO) to compensate frequency regulation (FR) resources based on the provided pay-for-performance requirements [2]. Apart from regulation market benefits, a savvy facility operator can also maximize potential benefits stemming from the energy-time-shift functionality of its onsite ESS [3]. This unique functionality of onsite ESSs unlocks utility bill management (UBM) via time-of-use (TOU) energy and demand charge cost-savings and energy arbitrage opportunities if intelligently sized and dispatched. Therefore, practical tools and methods to evaluate various onsite ESSs by quantifying their impacts on potential stacked-up benefits would aid facility operators in maximizing both cost-savings via UBM and revenue streams from energy arbitrage and FR market opportunities.