Cost-Effective Community Battery Sizing and Operation Within a Local Market Framework

Abstract

Extreme peak power demand is a major factor behind high electricity prices, despite occurring only for a few hours annually. This peak demand drives the need for costly upgrades for the network asset, which is ultimately passed on to the end-users through higher electricity network tariffs. To alleviate this issue, we propose a solution for cost-effective peak demand reduction in a local neighbourhood using prosumer-centric flexibility and community battery storage (CBS). Accordingly, we present a CBS sizing framework for peak demand reduction considering receding horizon operation and a bilevel program in which a profit-making entity (leader) operates the CBS and dynamically sets mark-up prices. Through the dynamic mark-up and real-time wholesale market prices, the CBS operator can harness the demand-side flexibility provided by the load-shifting behaviour of the local prosumers (followers). To this end, we develop a realistic price-responsive model that adjusts prosumers' behaviour with respect to fluctuations of dynamic prices while considering prosumers' discomfort caused by load shifting. The simulation results based on real-world data show that adopting the proposed framework and the price-responsive model not only increases the CBS owner's profit but also reduces peak demand and prosumers' electricity bills by 38% and 24%, respectively.