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Degradation-infused energy portfolio allocation framework: Risk-averse fair storage participation

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  • Pareek, Parikshit
  • Sampath, L.P. Mohasha Isuru
  • Singh, Anshuman
  • Goel, Lalit
  • Gooi, Hoay Beng
  • Nguyen, Hung Dinh

Abstract

This work proposes a novel degradation-infused energy portfolio allocation (DI-EPA) framework for enabling the participation of battery energy storage systems in multi-service electricity markets. The proposed framework attempts to address the challenge of including the rainflow algorithm for cycle counting by directly developing a closed-form of marginal degradation as a function of dispatch decisions. Further, this closed-form degradation profile is embedded into an energy portfolio allocation (EPA) problem designed for making the optimal dispatch decisions for all the batteries together, in a shared economy manner. We term the entity taking these decisions as ‘facilitator’ which works as a link between storage units and market operators. The proposed EPA formulation is quipped with a conditional-value-at-risk (CVaR)-based mechanism to bring risk-averseness against uncertainty in market prices. The proposed DI-EPA problem introduces fairness by dividing the profits into various units using the idea of marginal contribution. Simulation results regarding the accuracy of the closed-form of degradation, effectiveness of CVaR in handling uncertainty within the EPA problem, and fairness in the context of degradation awareness are discussed. Numerical results indicate that the DI-EPA framework improves the net profit of the storage units by considering the effect of degradation in optimal market participation.

Suggested Citation

  • Pareek, Parikshit & Sampath, L.P. Mohasha Isuru & Singh, Anshuman & Goel, Lalit & Gooi, Hoay Beng & Nguyen, Hung Dinh, 2024. "Degradation-infused energy portfolio allocation framework: Risk-averse fair storage participation," Energy, Elsevier, vol. 313(C).
    • Handle: RePEc:eee:energy:v:313:y:2024:i:c:s0360544224034662
    DOI: 10.1016/j.energy.2024.133688
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