Energy storage time-of-use electricity price policy

Do storage systems influence electricity prices?

In the existing TOU pricing models for instance, interactions with other sources of power system flexibility such as storage devices and electric vehicles have never been studied even though bulk storage systems and plug-in electric vehicle operations may influence grid stability and electricity prices.

What is a time-of-use pricing model?

This paper presents a time-of-use (TOU) pricing model of the electricity market that can capture the interaction between power plants, generation ramping, storage devices, electric vehicle loading, and electricity prices.

Do electricity prices reflect time-varying and season-dependent costs?

As a result, it is presumed that prices that are reflective of the time-varying and season-dependent costs of generation and distribution may encourage consumers to reduce or at least shift some of their electricity consumption from peak periods when prices are higher to off-peak periods when prices are lower (Gambardella and Pahle, 2018).

Does electricity storage cause losses to power generation profits?

This aspect contradicts conventional wisdom from investment and dispatch studies which exert that the price-smoothing effect from electricity storage may cause losses to power generation profits.

Why do we use storage during peak periods?

Clearly, as discussed earlier, storage generation during peak periods avoids the need for excess ramping of thermal generation and thus limits the economic and environmental costs of the power system. It can also be seen that emissions are higher in the summer months suggesting greater opportunities from storage utilization during these periods.

Why are investment costs omitted in power generation model?

Capacity expansion over time is unlikely due to the short-term nature of the model. For this reason, investment costs are omitted. The technology-specific variable costs of power generation (v g i) (third column top panel), as well as emissions factor (bottom panel) are sourced from Zhang et al. (2017).