Optimal sizing and operations of shared energy storage systems in distribution networks: A bi-level programming approach

Rather than using individually distributed energy storage frameworks, shared energy storage is being exploited because of its low cost and high efficiency. However, proper sizing and operations approaches are still required to take advantage of shared energy storage in distribution networks. This paper proposes a bi-level model to optimize the size and operations of shared energy storage in hybrid renewable-resource power generation systems. The upper-level model maximizes the benefits of sharing energy storage for the involved stakeholders (transmission and distribution system operators, shared energy storage operators and the various power plant owners) and the lower-level model minimizes the hybrid system operating costs. The benefits of this system were found to be: (1) reductions in wind and solar power curtailment and coal-fired generation costs; (2) peak shaving; (3) frequency regulation; and (4) a deferral of upgrades to power transmission and distribution facilities. To fully realize the long-term planning and short-term operational interactions of shared energy storage, a bi-level nested genetic algorithm was designed to solve the proposed model. By continuously updating the solutions, a set of optimal solutions were generated. To validate the approach, numerical tests were conducted, with the results showing that by properly sizing and operating the shared energy storage in distribution networks, the wind curtailment rate was reduced by about 10.2%, the solar curtailment rate was reduced by 14.2%, and the stakeholder benefits were around 154 million dollars. Further discussion is given on the benefits of shared energy storage investments.