The primary benefit from using energy storage for peak shaving is … wait for it … peak shaving. That is obvious. However, if there is also a time-of-use (TOU) rate in place, there can be a second benefit from energy arbitrage. There is also a cost, which is related to recharging the battery after a discharge event.
Definitions:
• Cost of Peak Electricity: PEAK ($/kWh)
• Cost of Off Peak Electricity: OFFPEAK ($/kWh)
• Demand Charge: DEMANDCHARGE ($/kW/mon)
• Demand Reduction: PEAKREDUCTION
• Useable Battery Capacity: CAP = Rated Capacity * maxDOD (kWh-AC)
• Actual Discharge: DISCHARGE (kWh-AC)
• Battery DC Round Trip Efficiency: DCRTE
• Inverter/Charger Efficiency: EFF (%)
• Peak Hours: Time of day that peak applies – may be seasonal, and may also vary by weekday / weekend / holiday
• OffPeak Hours: Time of day that off-peak applies – may be seasonal, and may also vary by weekday / weekend / holiday
Algorithm 1 – No TOU rate
Monthly Benefit = (PEAKREDUCTION * DEMANDCHARGE) + ∑all events [(PEAK * DISCHARGE) – (PEAK_DISCHARGE/(DCRTE_EFF*EFF))]
Assumes there is no time-value to the energy, so the net cost of using the battery is just the total round trip losses. The second term will necessarily be negative.
Algorithm 2 – Simple TOU Rate
Monthly Benefit = (PEAKREDUCTION * DEMANDCHARGE) + ∑all events [(PEAK * DISCHARGE) – (OFFPEAK_DISCHARGE/(DCRTE_EFF*EFF))]
Assume that all discharges happen on peak, and all recharges happen off peak, so you need the full TOU schedule.
The battery control algorithm would have to be modified to make sure that the battery is only recharged off peak.
The second term may be positive or negative, depending on the rate.
Algorithm 3 – Realistic TOU Rate
Monthly Benefit = (PEAKREDUCTION * DEMANDCHARGE) + ∑all events [((PEAK or OFFPEAK) * DISCHARGE) – ((PEAK or OFFPEAK) _DISCHARGE/(DCRTE_EFF*EFF))]
Assume that discharges may be on peak or off peak, and recharges happen on peak or off peak, so you need the full TOU schedule.
The second term may be positive or negative, depending on the rate.
The primary benefit from using energy storage for peak shaving is … wait for it … peak shaving. That is obvious. However, if there is also a time-of-use (TOU) rate in place, there can be a second benefit from energy arbitrage. There is also a cost, which is related to recharging the battery after a discharge event. Definitions: • Cost of Peak Electricity: PEAK ($/kWh) • Cost of Off Peak Electricity: OFFPEAK ($/kWh) • Demand Charge: DEMANDCHARGE ($/kW/mon) • Demand Reduction: PEAKREDUCTION • Useable Battery Capacity: CAP = Rated Capacity * maxDOD (kWh-AC) • Actual Discharge: DISCHARGE (kWh-AC) • Battery DC Round Trip Efficiency: DCRTE • Inverter/Charger Efficiency: EFF (%) • Peak Hours: Time of day that peak applies – may be seasonal, and may also vary by weekday / weekend / holiday • OffPeak Hours: Time of day that off-peak applies – may be seasonal, and may also vary by weekday / weekend / holiday
Algorithm 1 – No TOU rate Monthly Benefit = (PEAKREDUCTION * DEMANDCHARGE) + ∑all events [(PEAK * DISCHARGE) – (PEAK_DISCHARGE/(DCRTE_EFF*EFF))] Assumes there is no time-value to the energy, so the net cost of using the battery is just the total round trip losses. The second term will necessarily be negative.
Algorithm 2 – Simple TOU Rate Monthly Benefit = (PEAKREDUCTION * DEMANDCHARGE) + ∑all events [(PEAK * DISCHARGE) – (OFFPEAK_DISCHARGE/(DCRTE_EFF*EFF))] Assume that all discharges happen on peak, and all recharges happen off peak, so you need the full TOU schedule. The battery control algorithm would have to be modified to make sure that the battery is only recharged off peak. The second term may be positive or negative, depending on the rate.
Algorithm 3 – Realistic TOU Rate Monthly Benefit = (PEAKREDUCTION * DEMANDCHARGE) + ∑all events [((PEAK or OFFPEAK) * DISCHARGE) – ((PEAK or OFFPEAK) _DISCHARGE/(DCRTE_EFF*EFF))] Assume that discharges may be on peak or off peak, and recharges happen on peak or off peak, so you need the full TOU schedule. The second term may be positive or negative, depending on the rate.