Scaling Distributed Energy Storage for Grid Peak Reduction Aditya Mishra, David Irwin, Prashant Shenoy, and Ting Zhuz University of Massachusetts Amherst zBinghamton University {adityam,irwin,shenoy}@cs.umass.edu
[email protected] ABSTRACT result from satisfying its peak power demands. For exam- Reducing peak demand is an important part of ongoing ple, recent work estimates that 10%-18% of North American smart grid research efforts. To reduce peak demand, util- CapEx, in terms of energy generation capacity, is idle and ities are introducing variable rate electricity prices. Recent wasted over 99% of the year [8]. Similarly, peak demand also efforts have shown how variable rate pricing can incentivize influences OpEx, by i) requiring utilities to operate high cost consumers to use energy storage to cut their electricity bill, and inefficient \peaking" generators to meet demand [1], ii) by storing energy during inexpensive off-peak periods and contributing to higher transmission charges, which are set using it during expensive peak periods. Unfortunately, vari- based on peak demand, and iii) forcing utilities to offset able rate pricing provides only a weak incentive for dis- supply shortages by purchasing electricity in the wholesale tributed energy storage and does not promote its adoption market at inopportune times, i.e., when it is most expen- at scale. In this paper, we present the storage adoption cycle sive. Thus, reducing peak demand and its impact on CapEx to describe the issues with incentivizing energy storage us- and OpEx is an important part of ongoing smart grid re- ing variable rates. We then propose a simple way to address search efforts.