Modeling Storage and Demand Management in Electricity Distribution Grids

20 Pages Posted: 28 Mar 2011

See all articles by Andreas Schröder

Andreas Schröder

German Institute for Economic Research (DIW Berlin)

Jan Siegmeier

Technische Universität Berlin (TU Berlin)

Murk Creusen

affiliation not provided to SSRN

Date Written: March 1, 2011

Abstract

Storage devices and demand control may constitute beneficial tools to optimize electricity generation with a large share of intermittent resources through inter-temporal substitution of load. We quantify the related cost reductions in a simulation model of a simplified stylized medium-voltage grid (10kV) under uncertain demand and wind output. Benders Decomposition Method is applied to create a two-stage stochastic program. The model informs an optimal investment sizing decision as regards specific 'smart grid' applications such as storage facilities and meters enabling load control. Model results indicate that central storage facilities are a more promising option for generation cost reductions as compared to demand management. Grid extensions are not appropriate in any of our scenarios. A sensitivity analysis is applied with respect to the market penetration of uncoordinated Plug-In Electric Vehicles which are found to strongly encourage investment into load control equipment for `smart` charging and slightly improve the case for central storage devices.

Keywords: Storage, demand management, stochastic optimization, Benders Decomposition

JEL Classification: Q40, Q41

Suggested Citation

Schröder, Andreas and Siegmeier, Jan and Creusen, Murk, Modeling Storage and Demand Management in Electricity Distribution Grids (March 1, 2011). DIW Berlin Discussion Paper No. 1110, Available at SSRN: https://ssrn.com/abstract=1793164 or http://dx.doi.org/10.2139/ssrn.1793164

Andreas Schröder (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Jan Siegmeier

Technische Universität Berlin (TU Berlin) ( email )

Straße des 17
Juni 135
Berlin, 10623
Germany

Murk Creusen

affiliation not provided to SSRN ( email )

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