Impact of Demand Response and Battery Energy Storage System on Electricity Markets
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The calls for the reduction of carbon dioxide (CO2) and other greenhouse gases emissions from conventional electricity generation have been dramatically growing in the recent years owing to their negative environmental impact which became evident in climate change. The penetration level of Renewable Energy Sources (RESs) in the electrical power system is promptly increasing as they provide a cleaner and a cheaper solution to generate electricity. The main impediment to the spread of these RESs is that they are not dispatchable due to their intermittent nature. For example, the photovoltaic arrays output depends mainly on the solar insolation level. As for wind generation, the output is primarily affected by the wind blow. Hence, their coincidence with demand is not guaranteed, and this affects system reliability. Distributed Energy Resources (DER), such as Energy Storage Systems (ESSs) and Demand Response (DR) can play a major role to overcome the operational challenges with RESs, especially in the context of Smart Grid (SG). The main aim of this research is to assess the effect of using DR service and utilizing an existing Battery Energy Storage System (BESS) with the objective of minimizing the costs from the utility point of view. This is carried out by solving a constrained Optimal Power Flow (OPF) problem in three different cases (i.e.: Base Case, DR Case and BESS Case) to get the total incurred costs, conventional generation commitment and Locational Marginal Costs (LMCs) in each case to highlight the impact of DR and BESS on the electricity market. The results obtained for the IEEE 14-bus system show that either the application of a DR program or the employment of an existing BESS with the objective of cost minimization can be beneficial in terms of reducing the running costs vis-à-vis operating the system with neither.
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Haytham Raafat Gamal Ibrahim (2017). Impact of Demand Response and Battery Energy Storage System on Electricity Markets. UWSpace. http://hdl.handle.net/10012/12751