Energy dispatch schedule optimization and cost benefit analysis for grid-connected, photovoltaic-battery storage systems

A linear programming (LP) routine was implemented to model optimal energy storage dispatch schedules for peak net load management and demand charge minimization in a grid-connected, combined photovoltaic-battery storage system (PV+ system). The LP leverages PV power output and load forecasts to minimize peak loads subject to elementary dynamical and electrical constraints of the PV+ system. Battery charge/discharge were simulated over a range of two PV+ system parameters (battery storage capacity and peak load reduction target) to obtain energy cost for. a time-of-use pricing schedule and the net present value (NPV) of the battery storage system. The financial benefits of our optimized energy dispatch schedule were compared with basic off-peak charging/on-peak discharging and real-time load response dispatch strategies that did not use any forecast information. The NPV of the battery array increased significantly when the battery was operated on the optimized schedule compared to the off-peak/on-peak and real time dispatch schedules. These trends were attributed to increased battery lifetime and reduced demand charges attained under the optimized dispatch strategy. Our results show that Lithium-ion batteries can be a financially viable energy storage solution in demand side, energy cost management applications at an installed cost of about $400 $500 per kW h (approximately 40-50% of 2011 market prices). The financial value of forecasting in energy storage dispatch optimization was calculated as a function of battery capacity ratio. (C) 2013 Elsevier Ltd. All rights reserved.