Optimal Management and Sizing of Energy Storage Under Dynamic Pricing for the Efficient Integration of Renewable Energy
We address the optimal energy storage management and sizing problem in the presence of renewable energy and dynamic pricing associated with electricity from the grid. We formulate the problem as a stochastic dynamic program that aims to minimize the long-run average cost of electricity used and inve...
Saved in:
| Published in: | IEEE transactions on power systems Vol. 30; no. 3; pp. 1164 - 1181 |
|---|---|
| Main Authors: | , |
| Format: | Journal Article |
| Language: | English |
| Published: |
IEEE
01.05.2015
|
| Subjects: | |
| ISSN: | 0885-8950, 1558-0679 |
| Online Access: | Get full text |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Abstract | We address the optimal energy storage management and sizing problem in the presence of renewable energy and dynamic pricing associated with electricity from the grid. We formulate the problem as a stochastic dynamic program that aims to minimize the long-run average cost of electricity used and investment in storage, if any, while satisfying all the demand. We model storage with ramp constraints, conversion losses, dissipation losses and an investment cost. We prove the existence of an optimal storage management policy under mild assumptions and show that it has a dual threshold structure. Under this policy, we derive structural results, which indicate that the marginal value from storage decreases with its size and that the optimal storage size can be computed efficiently. We prove a rather surprising result, as we characterize the maximum value of storage under constant prices and i.i.d. net-demand processes: if the storage is a profitable investment, then the ratio of the amortized cost of storage to the constant price is less than 1/4. We further perform sensitivity analysis on the size of optimal storage and its gain via a case study. Finally, with a computational study on real data, we demonstrate significant savings with energy storage. |
|---|---|
| AbstractList | We address the optimal energy storage management and sizing problem in the presence of renewable energy and dynamic pricing associated with electricity from the grid. We formulate the problem as a stochastic dynamic program that aims to minimize the long-run average cost of electricity used and investment in storage, if any, while satisfying all the demand. We model storage with ramp constraints, conversion losses, dissipation losses and an investment cost. We prove the existence of an optimal storage management policy under mild assumptions and show that it has a dual threshold structure. Under this policy, we derive structural results, which indicate that the marginal value from storage decreases with its size and that the optimal storage size can be computed efficiently. We prove a rather surprising result, as we characterize the maximum value of storage under constant prices and i.i.d. net-demand processes: if the storage is a profitable investment, then the ratio of the amortized cost of storage to the constant price is less than 1/4. We further perform sensitivity analysis on the size of optimal storage and its gain via a case study. Finally, with a computational study on real data, we demonstrate significant savings with energy storage. |
| Author | Dahleh, Munther Harsha, Pavithra |
| Author_xml | – sequence: 1 givenname: Pavithra surname: Harsha fullname: Harsha, Pavithra email: pharsha@us.ibm.com organization: Bus. Analytics & Math. Sci., IBM Watson Res. Center, Yorktown Heights, NY, USA – sequence: 2 givenname: Munther surname: Dahleh fullname: Dahleh, Munther organization: Lab. for Inf. & Decision Syst., Massachusetts Inst. of Technol., Cambridge, MA, USA |
| BookMark | eNp9kMtOwzAQRS1UJNrCD8DGP5DiR-LYS1QKVCpq1YdYRm4yDkapUzmWqvL1JG3FggWrkWbmXM2cAeq52gFC95SMKCXqcb34WK5GjNB4xHgcy0RdoT5NEhkRkaoe6hMpk0iqhNygQdN8EUJEO-ijw3wf7E5X-F07XcIOXMDaFXhlv60rcW3wxIEvj3gVat8u4I0rwOPno9M7m-OFt3m3Z2qPwyfgiTFtowuZugCl18HWrktZgoOD3lZwybtF10ZXDdxd6hBtXibr8Vs0m79Ox0-zKOcpCZGhVEjgsaISmEzjwmiiBJHbQgii5FYwlsv2RS1SSmKTG8Y0lUZxYQw3vOBDJM-5ua-bxoPJchtOVwWvbZVRknUCs5PArBOYXQS2KPuD7n2ryh__hx7OkAWAX0BISWKa8h_K9H_T |
| CODEN | ITPSEG |
| CitedBy_id | crossref_primary_10_1109_TSTE_2016_2541685 crossref_primary_10_1016_j_epsr_2016_07_013 crossref_primary_10_1088_1757_899X_955_1_012002 crossref_primary_10_1016_j_compeleceng_2024_109758 crossref_primary_10_1109_TPWRS_2024_3509913 crossref_primary_10_1111_poms_13068 crossref_primary_10_1109_ACCESS_2020_2977985 crossref_primary_10_1016_j_apenergy_2018_08_043 crossref_primary_10_1080_15435075_2022_2040509 crossref_primary_10_1016_j_est_2022_104816 crossref_primary_10_1016_j_segan_2023_101152 crossref_primary_10_1016_j_disopt_2018_06_002 crossref_primary_10_1002_2050_7038_13142 crossref_primary_10_1002_er_4125 crossref_primary_10_1016_j_est_2020_101787 crossref_primary_10_1016_j_est_2021_102754 crossref_primary_10_1109_TPWRS_2014_2341642 crossref_primary_10_1109_TPWRS_2016_2553961 crossref_primary_10_1109_TPWRS_2017_2762350 crossref_primary_10_1109_TPWRS_2016_2627583 crossref_primary_10_1109_TVT_2015_2399411 crossref_primary_10_1109_TSG_2016_2586892 crossref_primary_10_1016_j_apenergy_2022_120121 crossref_primary_10_1016_j_apenergy_2024_123066 crossref_primary_10_1109_TSTE_2016_2565700 crossref_primary_10_1049_iet_gtd_2018_5883 crossref_primary_10_1016_j_est_2020_101713 crossref_primary_10_1109_TSG_2018_2842154 crossref_primary_10_1016_j_ifacol_2018_07_348 crossref_primary_10_1039_D2RA03341K crossref_primary_10_1109_TSTE_2016_2637916 crossref_primary_10_3390_en18061483 crossref_primary_10_1109_TSG_2015_2466078 crossref_primary_10_1007_s10287_015_0235_0 crossref_primary_10_1109_TSG_2017_2703578 crossref_primary_10_1016_j_seta_2019_04_006 crossref_primary_10_1080_24725854_2018_1440670 crossref_primary_10_1016_j_cie_2022_108853 crossref_primary_10_1016_j_cnsns_2019_104929 crossref_primary_10_3390_en18030478 crossref_primary_10_1016_j_ijepes_2019_04_016 crossref_primary_10_1109_TII_2017_2761819 crossref_primary_10_1109_TSTE_2017_2771359 crossref_primary_10_1111_itor_12834 crossref_primary_10_1016_j_disopt_2017_11_001 crossref_primary_10_1109_TSG_2017_2684815 crossref_primary_10_1016_j_ijepes_2018_07_020 crossref_primary_10_1016_j_rser_2018_01_013 crossref_primary_10_1109_TSG_2020_2966620 crossref_primary_10_1109_TPWRS_2018_2879612 crossref_primary_10_1016_j_compchemeng_2017_10_033 crossref_primary_10_1016_j_renene_2019_09_077 crossref_primary_10_3390_su17052278 crossref_primary_10_1016_j_est_2020_101443 crossref_primary_10_1111_poms_12946 crossref_primary_10_1016_j_egyr_2021_02_007 crossref_primary_10_3390_polym10111207 crossref_primary_10_1049_iet_rpg_2017_0008 crossref_primary_10_1109_ACCESS_2020_3031197 crossref_primary_10_1109_JPETS_2018_2854709 crossref_primary_10_3390_en12234577 crossref_primary_10_1016_j_cor_2016_12_027 crossref_primary_10_3390_app9010169 crossref_primary_10_1109_TPWRS_2017_2746261 crossref_primary_10_1007_s10589_018_0015_1 crossref_primary_10_1016_j_energy_2021_120530 crossref_primary_10_1016_j_est_2017_05_003 crossref_primary_10_1017_S0269964821000206 crossref_primary_10_1109_TPDS_2015_2478785 crossref_primary_10_3390_en11030591 crossref_primary_10_1002_er_4612 crossref_primary_10_1109_TPWRS_2018_2842093 crossref_primary_10_1109_TSG_2020_3012124 crossref_primary_10_1109_TSTE_2015_2498599 crossref_primary_10_1109_TEM_2020_2971246 crossref_primary_10_1007_s42524_022_0194_4 crossref_primary_10_1016_j_rser_2022_112744 crossref_primary_10_1049_iet_gtd_2020_0606 crossref_primary_10_1016_j_apenergy_2018_08_003 crossref_primary_10_3390_su10062014 crossref_primary_10_1016_j_enbuild_2025_115856 crossref_primary_10_3390_en15093154 crossref_primary_10_1016_j_esr_2024_101349 crossref_primary_10_1109_TSG_2021_3061619 crossref_primary_10_1016_j_enpol_2020_112005 crossref_primary_10_1109_TSG_2016_2542367 crossref_primary_10_1016_j_est_2022_106403 crossref_primary_10_1016_j_ijpe_2025_109696 crossref_primary_10_1016_j_energy_2017_12_132 crossref_primary_10_1109_TSG_2015_2514286 crossref_primary_10_1109_TSTE_2016_2616444 crossref_primary_10_1016_j_segan_2025_101923 crossref_primary_10_3390_app7040398 crossref_primary_10_1109_TSG_2015_2494874 crossref_primary_10_1016_j_ijepes_2018_02_034 crossref_primary_10_1049_iet_gtd_2018_5606 crossref_primary_10_1287_ijoc_2016_0733 crossref_primary_10_1016_j_cie_2025_110901 crossref_primary_10_1016_j_segan_2022_100809 crossref_primary_10_1016_j_compchemeng_2021_107306 crossref_primary_10_3390_en14020303 crossref_primary_10_1016_j_ifacol_2019_08_203 crossref_primary_10_1049_iet_rpg_2018_5216 crossref_primary_10_1016_j_energy_2020_118904 crossref_primary_10_1287_msom_2023_0068 crossref_primary_10_1016_j_apenergy_2024_124105 crossref_primary_10_1109_TSTE_2024_3417249 crossref_primary_10_1109_TII_2015_2509424 crossref_primary_10_1109_TSG_2016_2611245 crossref_primary_10_1109_JSAC_2016_2525618 crossref_primary_10_3390_en15114116 crossref_primary_10_1109_ACCESS_2018_2844794 crossref_primary_10_1109_TIA_2015_2499287 crossref_primary_10_1109_TPWRS_2018_2875457 crossref_primary_10_1016_j_apenergy_2018_04_005 crossref_primary_10_1016_j_energy_2019_02_053 crossref_primary_10_1016_j_est_2020_102057 crossref_primary_10_1109_ACCESS_2021_3054860 crossref_primary_10_1109_TSG_2023_3263862 crossref_primary_10_1109_TCST_2023_3269808 crossref_primary_10_1109_TSTE_2018_2870043 crossref_primary_10_1016_j_ijepes_2021_107798 crossref_primary_10_7737_KMSR_2016_33_1_035 crossref_primary_10_1002_2050_7038_12124 crossref_primary_10_1016_j_ejor_2017_06_052 crossref_primary_10_1109_TAC_2020_3046555 crossref_primary_10_1016_j_est_2018_04_025 crossref_primary_10_1016_j_matcom_2018_07_010 crossref_primary_10_1016_j_renene_2016_03_101 crossref_primary_10_1080_24725854_2017_1401756 crossref_primary_10_1016_j_sysconle_2018_09_007 crossref_primary_10_1109_TPWRS_2014_2387700 crossref_primary_10_3390_en12091608 crossref_primary_10_1109_TSG_2021_3083882 crossref_primary_10_1109_TSG_2016_2616881 crossref_primary_10_1109_ACCESS_2019_2905620 |
| Cites_doi | 10.1109/CDC.2011.6161519 10.1007/978-1-4612-0729-0 10.1287/mnsc.1090.1049 10.1109/CDC.2011.6160862 10.1287/opre.2013.1237 10.1016/S0960-1481(03)00019-3 10.1109/ICC.2013.6655201 10.1007/BFb0035505 10.1109/Allerton.2011.6120239 10.1287/opre.1110.0971 10.1016/0167-6105(94)00093-S 10.1109/TPWRS.2008.919419 10.2139/ssrn.1962414 10.1007/s12667-013-0108-y 10.1109/TSG.2012.2232943 10.1109/TPWRS.2012.2183395 |
| ContentType | Journal Article |
| DBID | 97E RIA RIE AAYXX CITATION |
| DOI | 10.1109/TPWRS.2014.2344859 |
| DatabaseName | IEEE All-Society Periodicals Package (ASPP) 2005–Present IEEE All-Society Periodicals Package (ASPP) 1998–Present IEEE Electronic Library (IEL) CrossRef |
| DatabaseTitle | CrossRef |
| DatabaseTitleList | |
| Database_xml | – sequence: 1 dbid: RIE name: IEEE Electronic Library (IEL) url: https://ieeexplore.ieee.org/ sourceTypes: Publisher |
| DeliveryMethod | fulltext_linktorsrc |
| Discipline | Engineering |
| EISSN | 1558-0679 |
| EndPage | 1181 |
| ExternalDocumentID | 10_1109_TPWRS_2014_2344859 6880417 |
| Genre | orig-research |
| GroupedDBID | -~X .DC 0R~ 29I 3EH 4.4 5GY 5VS 6IK 85S 97E AAJGR AARMG AASAJ AAWTH ABAZT ABFSI ABQJQ ABVLG ACGFO ACGFS ACIWK ACKIV AENEX AETIX AGQYO AGSQL AHBIQ AI. AIBXA AKJIK AKQYR ALLEH ALMA_UNASSIGNED_HOLDINGS ASUFR ATWAV BEFXN BFFAM BGNUA BKEBE BPEOZ CS3 DU5 E.L EBS EJD HZ~ H~9 ICLAB IFIPE IFJZH IPLJI JAVBF LAI M43 MS~ O9- OCL P2P RIA RIE RNS TAE TN5 VH1 VJK AAYXX CITATION |
| ID | FETCH-LOGICAL-c370t-f1168e34918e2874dfa09608bd66098b622c8067a67104fcf22a18f936ff3f3d3 |
| IEDL.DBID | RIE |
| ISICitedReferencesCount | 192 |
| ISICitedReferencesURI | http://www.webofscience.com/api/gateway?GWVersion=2&SrcApp=Summon&SrcAuth=ProQuest&DestLinkType=CitingArticles&DestApp=WOS_CPL&KeyUT=000353641000006&url=https%3A%2F%2Fcvtisr.summon.serialssolutions.com%2F%23%21%2Fsearch%3Fho%3Df%26include.ft.matches%3Dt%26l%3Dnull%26q%3D |
| ISSN | 0885-8950 |
| IngestDate | Tue Nov 18 21:45:00 EST 2025 Sat Nov 29 02:52:06 EST 2025 Wed Aug 27 02:51:37 EDT 2025 |
| IsPeerReviewed | true |
| IsScholarly | true |
| Issue | 3 |
| Language | English |
| License | https://ieeexplore.ieee.org/Xplorehelp/downloads/license-information/IEEE.html |
| LinkModel | DirectLink |
| MergedId | FETCHMERGED-LOGICAL-c370t-f1168e34918e2874dfa09608bd66098b622c8067a67104fcf22a18f936ff3f3d3 |
| PageCount | 18 |
| ParticipantIDs | ieee_primary_6880417 crossref_citationtrail_10_1109_TPWRS_2014_2344859 crossref_primary_10_1109_TPWRS_2014_2344859 |
| PublicationCentury | 2000 |
| PublicationDate | 2015-05-01 |
| PublicationDateYYYYMMDD | 2015-05-01 |
| PublicationDate_xml | – month: 05 year: 2015 text: 2015-05-01 day: 01 |
| PublicationDecade | 2010 |
| PublicationTitle | IEEE transactions on power systems |
| PublicationTitleAbbrev | TPWRS |
| PublicationYear | 2015 |
| Publisher | IEEE |
| Publisher_xml | – name: IEEE |
| References | ref13 ref12 ref15 heyman (ref25) 1984 ref14 ref11 (ref3) 2010 ref17 ref16 ref19 ref18 (ref1) 2011 durrett (ref27) 2005 ru (ref10) 2011 ref24 ref23 bertsekas (ref26) 1978 zipkin (ref22) 2000 ref21 ref8 ref7 ref9 (ref2) 2008 ref6 (ref4) 2007 (ref5) 2010 bertsekas (ref20) 2007; 2 |
| References_xml | – ident: ref17 doi: 10.1109/CDC.2011.6161519 – ident: ref21 doi: 10.1007/978-1-4612-0729-0 – ident: ref16 doi: 10.1287/mnsc.1090.1049 – year: 2008 ident: ref2 publication-title: 20% Wind Energy by 2030 – ident: ref9 doi: 10.1109/CDC.2011.6160862 – ident: ref19 doi: 10.1287/opre.2013.1237 – ident: ref24 doi: 10.1016/S0960-1481(03)00019-3 – year: 2007 ident: ref4 publication-title: Pacific Northwest GridWise Testbed Demonstration Projects Part I Olympic Peninsula Project – ident: ref18 doi: 10.1109/ICC.2013.6655201 – volume: 2 year: 2007 ident: ref20 publication-title: Dynamic Programming and Optimal Control – year: 2000 ident: ref22 publication-title: Foundations of Inventory Management – year: 1984 ident: ref25 publication-title: Stochastic Models in Operations Research Volume II Stochastic Optimization – ident: ref15 doi: 10.1007/BFb0035505 – ident: ref11 doi: 10.1109/Allerton.2011.6120239 – ident: ref6 doi: 10.1287/opre.1110.0971 – ident: ref23 doi: 10.1016/0167-6105(94)00093-S – year: 2011 ident: ref10 article-title: Storage size determination for grid-connected photovoltaic systems – year: 2010 ident: ref3 publication-title: Eastern Wind Integration and Transmission Study – year: 1978 ident: ref26 publication-title: Stochastic Optimal Control The Discrete Time Case – ident: ref12 doi: 10.1109/TPWRS.2008.919419 – ident: ref13 doi: 10.2139/ssrn.1962414 – ident: ref8 doi: 10.1007/s12667-013-0108-y – year: 2005 ident: ref27 publication-title: Probability Theory and Examples – year: 2011 ident: ref1 publication-title: Inventory of U S Greenhouse Gas Emissions and Sinks 1990?2009 – ident: ref14 doi: 10.1109/TSG.2012.2232943 – year: 2010 ident: ref5 publication-title: Western wind and solar integration study – ident: ref7 doi: 10.1109/TPWRS.2012.2183395 |
| SSID | ssj0006679 |
| Score | 2.5571535 |
| Snippet | We address the optimal energy storage management and sizing problem in the presence of renewable energy and dynamic pricing associated with electricity from... |
| SourceID | crossref ieee |
| SourceType | Enrichment Source Index Database Publisher |
| StartPage | 1164 |
| SubjectTerms | Dynamic programming/optimal control Electricity Energy storage Equations infinite horizon Investment management operations Pricing renewable energy Renewable energy sources Storage management |
| Title | Optimal Management and Sizing of Energy Storage Under Dynamic Pricing for the Efficient Integration of Renewable Energy |
| URI | https://ieeexplore.ieee.org/document/6880417 |
| Volume | 30 |
| WOSCitedRecordID | wos000353641000006&url=https%3A%2F%2Fcvtisr.summon.serialssolutions.com%2F%23%21%2Fsearch%3Fho%3Df%26include.ft.matches%3Dt%26l%3Dnull%26q%3D |
| hasFullText | 1 |
| inHoldings | 1 |
| isFullTextHit | |
| isPrint | |
| journalDatabaseRights | – providerCode: PRVIEE databaseName: IEEE Electronic Library (IEL) customDbUrl: eissn: 1558-0679 dateEnd: 99991231 omitProxy: false ssIdentifier: ssj0006679 issn: 0885-8950 databaseCode: RIE dateStart: 19860101 isFulltext: true titleUrlDefault: https://ieeexplore.ieee.org/ providerName: IEEE |
| link | http://cvtisr.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwlV3PS8MwFA7b8KAHf01x_iIHb9qtbdrk9Si6oSBzbFN3K1mbwEA7mZsD_3rz0q7uIIK30r48Sr6SvNe8932EXAQSPGT-c2TAhIMHhs5YBokD4AmTcWkIbXv084PodmE0inoVclX2wiilbPGZauKlPctPp8kCf5W1OCBbjqiSqhA879UqV13Oc149gNCBKHRXDTJu1Br2XvoDrOIKmj4z6Qjykq5tQmuqKnZT6ez873V2yXYRPNLrHO09UlHZPtlaoxSsk-WjWQPejNFPXQuVWUoHky_znE41bdtuPzowybYxoFb4iN7mwvQUVeDRzoSy1ISGtG0ZJtDJfcErYXBEL32zRi6x7arwd0CeOu3hzZ1TiCs4CRPu3NGex0GxIPJAIed9qiVmMzBOOXcjGHPfT8BsZZKbGCTQifZ96YGOGNeaaZayQ1LLppk6IpRHYFyZ3EiM00CHWiqGiljgJ1pKwWSDeKvZjpOCeRwFMF5jm4G4UWwRihGhuECoQS7LMe8578af1nWEp7QskDn-_fYJ2TSDw7xs8ZTU5rOFOiMbyed88jE7t5_VNxEKyjY |
| linkProvider | IEEE |
| linkToHtml | http://cvtisr.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwlV1LS8NAEB60CurBt_h2D940NsluNpOjaKVirWLr4xa2yS4I2kptLfjr3dnE2oMI3kIyGUK-MDuTnfk-gEOhMCDmP08JHnu0Yeh1lMg8xCC2FZfByI1HPzTiZhOfnpLbKTgez8JorV3zmT6hQ7eXn_eyIf0qq0oktpx4GmYiIUK_mNYax10pC2Y9xMjDJPK_R2T8pNq-fbxrUR-XOAm5LUiImXRiGZrQVXHLysXS_x5oGRbL9JGdFnivwJTursLCBKngGoxubBR4tUY_nS1MdXPWev6011nPsJqb92MtW25bA-akj9h5IU3PSAee7Gwyy2xyyGqOY4KcXJbMEhZJ8nJno-SIBq9Kf-twf1Frn9W9Ul7By3jsDzwTBBI1F0mAmljvc6OonsFOLqWfYEeGYYZ2MVPSZiHCZCYMVYAm4dIYbnjON6DS7XX1JjCZoHVlq6O4kwsTGaU5aWJhmBmlYq62IPh-22lWco-TBMZL6moQP0kdQikhlJYIbcHR-J63gnnjT-s1gmdsWSKz_fvpA5irt68baeOyebUD89ZRVDQx7kJl0B_qPZjNPgbP7_1994l9Ab6bzX0 |
| openUrl | ctx_ver=Z39.88-2004&ctx_enc=info%3Aofi%2Fenc%3AUTF-8&rfr_id=info%3Asid%2Fsummon.serialssolutions.com&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.atitle=Optimal+Management+and+Sizing+of+Energy+Storage+Under+Dynamic+Pricing+for+the+Efficient+Integration+of+Renewable+Energy&rft.jtitle=IEEE+transactions+on+power+systems&rft.au=Harsha%2C+Pavithra&rft.au=Dahleh%2C+Munther&rft.date=2015-05-01&rft.issn=0885-8950&rft.eissn=1558-0679&rft.volume=30&rft.issue=3&rft.spage=1164&rft.epage=1181&rft_id=info:doi/10.1109%2FTPWRS.2014.2344859&rft.externalDBID=n%2Fa&rft.externalDocID=10_1109_TPWRS_2014_2344859 |
| thumbnail_l | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/lc.gif&issn=0885-8950&client=summon |
| thumbnail_m | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/mc.gif&issn=0885-8950&client=summon |
| thumbnail_s | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/sc.gif&issn=0885-8950&client=summon |