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An investigation of battery storage operating strategies in the context of smart cities

Xing Yao (School of Economics and Management, Beihang University, Beijing, China) (Lab for Low-carbon Intelligent Governance (LLIG), Beihang University, Beijing, China)
Shao-Chao Ma (School of Economics and Management, China University of Geosciences, Beijing, China)
Ying Fan (School of Economics and Management, Beihang University, Beijing, China) (Lab for Low-carbon Intelligent Governance (LLIG), Beihang University, Beijing, China)
Lei Zhu (School of Economics and Management, Beihang University, Beijing, China) (Lab for Low-carbon Intelligent Governance (LLIG), Beihang University, Beijing, China)
Bin Su (Energy Studies Institute, National University of Singapore, Singapore, Singapore)

Industrial Management & Data Systems

ISSN: 0263-5577

Article publication date: 10 August 2022

Issue publication date: 2 November 2022

219

Abstract

Purpose

The ongoing urbanization and decarbonization require deployment of energy storage in the urban energy system to integrate large-scale variable renewable energy (VRE) into the power grids. The cost reductions of batteries enable private entities to invest energy storage for energy management whose operating strategy may differ from traditional storage facilities. This study aims to investigate the impacts of energy storage on the power system with different operation strategies. Two strategies are modeled through a simulation-based regional economic power dispatch model. The profit-oriented strategy denotes the storage system operated by private entities for price arbitrage, and the nonprofit-oriented strategy denotes the storage system dispatched by an independent system operator (ISO) for the whole power system optimization. A case study of Jiangsu, China is conducted. The results show that the profit-oriented strategy only has a very limited impact on the cost reductions of power system and may even increase the cost for consumers. While nonprofit-oriented energy storage performs a positive effect on the system cost reduction. CO2 emission reduction can only be achieved under a high VRE scenario for energy storage. Integrating energy storage into the power system may increase CO2 emissions in the near term. In addition, the peak-valley spread is crucial to trigger operations of profit-oriented energy storage, and the profitability of energy storage operator is observed to be decreasing with the total storage capacity. This study provides new insights for the energy management in the smart city, and the modeling framework can be applied to regions with different resource endowments.

Design/methodology/approach

The authors characterize two battery storage operating strategies of profit- and nonprofit-oriented by adopting a simulation-based economic dispatch model. A simulation from 36 years of hourly weather data of wind and solar output from case study of Jiangsu, China is conducted.

Findings

The results show that the profit-oriented strategy only has a very limited impact on the cost reductions of power system and may even increase the cost for consumers. While nonprofit-oriented energy storage performs a positive effect on the system cost reduction. CO2 emission reduction can only be achieved under high VRE scenario for energy storage. Integrating energy storage into the power system may increase CO2 emissions in the near term. In addition, the peak-valley spread is crucial to trigger operations of profit-oriented energy storage, and the profitability of energy storage operator is observed to be decreasing with the total storage capacity.

Originality/value

This study provides new insights for the energy management in the smart city, and the modeling framework can be applied to regions with different resource endowments.

Keywords

Acknowledgements

This research is supported by China Postdoctoral Science Foundation [Grant No. 2022M710292], the National Natural Science Foundation of China [Grant No. 71673019, No. 72122002, No. 72021001, No. 72034003] and the National Key Research and Development Programme of China [Grant No. 2020YFA0608603].

Citation

Yao, X., Ma, S.-C., Fan, Y., Zhu, L. and Su, B. (2022), "An investigation of battery storage operating strategies in the context of smart cities", Industrial Management & Data Systems, Vol. 122 No. 10, pp. 2393-2415. https://doi.org/10.1108/IMDS-01-2022-0011

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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