Energy storage optimization strategies for smart grids

The efficient management of the supply and demand in electricity networks is becoming a pivotal issue with important fallbacks both in the technological and financial domains. An interesting topic in this domain is the use of large batteries at the end users premises to reduce the average cost of energy supply, by storing energy when its cost is low and releasing it when the cost is high. In this paper, we wish to gain insights on the impact of some system model parameters, such as battery capacity, charge/discharge rate, power request process, and cost functions, on the cost saving that can be achieved by some selected energy storage algorithms. The study shows that the battery capacity has a direct and rather linear impact on cost reduction, while the effect of charge/discharge rates is less straightforward to predict. Furthermore, we show that, with piecewise, convex and non-decreasing cost functions, the optimal energy storage strategy has a threshold structure, where the number of thresholds depend on the shape of the cost function and the constraints of the battery.