IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v108y2017icp523-532.html
   My bibliography  Save this article

Evaluating demand charge reduction for commercial-scale solar PV coupled with battery storage

Author

Listed:
  • Park, Alex
  • Lappas, Petros

Abstract

Solar PV and battery storage technologies are known to provide savings to customers in the form of reduced electricity charges. Currently, these savings are only determined for the volume component (kWh) and not the demand component (kW or kVA). As interest grows in commercial solar PV and battery storage installations, the need to predict demand charge reductions is great. The aim of this research is to determine, with accuracy and reliability, the ability of solar PV and battery storage technologies in reducing demand charges. Results have shown that when simulated against a commercial-scale electricity consumption profile solar PV was able to reduce the maximum demand across five electricity networks in Australia by 0.05–1.51%. When coupled with a 12 kWh battery storage an additional 1.31–2.02% reduction was experienced. Battery utilisation strategy was shown to be critical in yielding greater demand reduction from the battery storage. Notably, it was shown that in the Ergon Energy electricity network, battery storage was able to supply demand at 34% lower cost ($/kW) than the network was able to. The results detail the first instance of demand reduction evaluation of solar PV coupled with battery storage, focusing on physical and financial outcomes in an Australian context.

Suggested Citation

  • Park, Alex & Lappas, Petros, 2017. "Evaluating demand charge reduction for commercial-scale solar PV coupled with battery storage," Renewable Energy, Elsevier, vol. 108(C), pages 523-532.
    • Handle: RePEc:eee:renene:v:108:y:2017:i:c:p:523-532
    DOI: 10.1016/j.renene.2017.02.060
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148117301465
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2017.02.060?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. ., 2016. "Public utility pricing and rate setting," Chapters, in: Public Utilities, Second Edition, chapter 10, pages 198-220, Edward Elgar Publishing.
    2. Xu, Tao & He, Jianmin & Li, Shouwei, 2016. "A dynamic network model for interbank market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 463(C), pages 131-138.
    3. Or Shachar & Jennifer La'O & Anna Costello & Nina Boyarchenko, 2015. "Credit Risk and Interdealer Networks," 2015 Meeting Papers 1048, Society for Economic Dynamics.
    4. Glassmire, John & Komor, Paul & Lilienthal, Peter, 2012. "Electricity demand savings from distributed solar photovoltaics," Energy Policy, Elsevier, vol. 51(C), pages 323-331.
    5. Du, Juan & Chen, Yao & Huo, Jiazhen, 2015. "DEA for non-homogenous parallel networks," Omega, Elsevier, vol. 56(C), pages 122-132.
    6. Lee, Ji Hyung & Phillips, Peter C.B., 2016. "Asset pricing with financial bubble risk," Journal of Empirical Finance, Elsevier, vol. 38(PB), pages 590-622.
    7. Evert Meijers & Martijn Burger & Edward L. Glaeser & Giacomo A. M. Ponzetto & Yimei Zou, 2016. "Urban networks: Connecting markets, people, and ideas," Papers in Regional Science, Wiley Blackwell, vol. 95(1), pages 17-59, March.
    8. Han, Dun & Sun, Mei & Li, Dandan, 2015. "Epidemic process on activity-driven modular networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 432(C), pages 354-362.
    9. Jens H. E. Christensen & Jose A. Lopez & Glenn D. Rudebusch, 2016. "Pricing Deflation Risk with US Treasury Yields," Review of Finance, European Finance Association, vol. 20(3), pages 1107-1152.
    10. Li, Angsheng & Li, Jiankou & Pan, Yicheng, 2015. "Discovering natural communities in networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 878-896.
    11. Richardson, David B. & Harvey, L.D.D., 2015. "Strategies for correlating solar PV array production with electricity demand," Renewable Energy, Elsevier, vol. 76(C), pages 432-440.
    12. Jules H. van Binsbergen & Ralph S. J. Koijen, 2016. "On the Timing and Pricing of Dividends: Reply," American Economic Review, American Economic Association, vol. 106(10), pages 3224-3237, October.
    13. repec:elg:eechap:15034_3 is not listed on IDEAS
    14. Stadler, M. & Kloess, M. & Groissböck, M. & Cardoso, G. & Sharma, R. & Bozchalui, M.C. & Marnay, C., 2013. "Electric storage in California’s commercial buildings," Applied Energy, Elsevier, vol. 104(C), pages 711-722.
    15. World Bank Group & ECOFYS, "undated". "Carbon Pricing Watch 2016," World Bank Publications - Reports 24288, The World Bank Group.
    16. Le, Anbo & Gao, Fei & Xi, Lifeng & Yin, Shuhua, 2015. "Complex networks modeled on the Sierpinski gasket," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 646-657.
    17. Björn Nykvist & Måns Nilsson, 2015. "Rapidly falling costs of battery packs for electric vehicles," Nature Climate Change, Nature, vol. 5(4), pages 329-332, April.
    18. World Bank & Ecofys & Vivid Economics, "undated". "State and Trends of Carbon Pricing 2016," World Bank Publications - Reports 25160, The World Bank Group.
    19. Burke, Kerry B., 2014. "The reliability of distributed solar in critical peak demand: A capital value assessment," Renewable Energy, Elsevier, vol. 68(C), pages 103-110.
    20. Liu, Jie & Li, Yunpeng & Ruan, Zichan & Fu, Guangyuan & Chen, Xiaowu & Sadiq, Rehan & Deng, Yong, 2015. "A new method to construct co-author networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 419(C), pages 29-39.
    21. Ranaweera, Iromi & Midtgård, Ole-Morten, 2016. "Optimization of operational cost for a grid-supporting PV system with battery storage," Renewable Energy, Elsevier, vol. 88(C), pages 262-272.
    22. Zhang, Qi & Luo, Chuanhai & Li, Meizhu & Deng, Yong & Mahadevan, Sankaran, 2015. "Tsallis information dimension of complex networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 419(C), pages 707-717.
    23. Nottrott, A. & Kleissl, J. & Washom, B., 2013. "Energy dispatch schedule optimization and cost benefit analysis for grid-connected, photovoltaic-battery storage systems," Renewable Energy, Elsevier, vol. 55(C), pages 230-240.
    24. Li, Ben-xian & Zhu, Jun-fang & Wang, Shun-guo, 2015. "Networks model of the East Turkistan terrorism," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 419(C), pages 479-486.
    25. Faxas-Guzmán, J. & García-Valverde, R. & Serrano-Luján, L. & Urbina, A., 2014. "Priority load control algorithm for optimal energy management in stand-alone photovoltaic systems," Renewable Energy, Elsevier, vol. 68(C), pages 156-162.
    26. Liu, Gang & Li, Yongshu & Guo, Jiawei & Li, Zheng, 2015. "Maximum transport capacity of a network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 432(C), pages 315-320.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Batlle, Carlos & Mastropietro, Paolo & Rodilla, Pablo, 2020. "Redesigning residual cost allocation in electricity tariffs: A proposal to balance efficiency, equity and cost recovery," Renewable Energy, Elsevier, vol. 155(C), pages 257-266.
    2. Lin He & Chang-Ling Li & Qing-Yun Nie & Yan Men & Hai Shao & Jiang Zhu, 2017. "Core Abilities Evaluation Index System Exploration and Empirical Study on Distributed PV-Generation Projects," Energies, MDPI, vol. 10(12), pages 1-18, December.
    3. Jia, Teng & Dai, Yanjun & Wang, Ruzhu, 2018. "Refining energy sources in winemaking industry by using solar energy as alternatives for fossil fuels: A review and perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 88(C), pages 278-296.
    4. Rosato, Antonio & Ciervo, Antonio & Ciampi, Giovanni & Scorpio, Michelangelo & Guarino, Francesco & Sibilio, Sergio, 2020. "Impact of solar field design and back-up technology on dynamic performance of a solar hybrid heating network integrated with a seasonal borehole thermal energy storage serving a small-scale residentia," Renewable Energy, Elsevier, vol. 154(C), pages 684-703.
    5. Braeuer, Fritz & Rominger, Julian & McKenna, Russell & Fichtner, Wolf, 2019. "Battery storage systems: An economic model-based analysis of parallel revenue streams and general implications for industry," Applied Energy, Elsevier, vol. 239(C), pages 1424-1440.
    6. Pakere, Ieva & Lauka, Dace & Blumberga, Dagnija, 2018. "Solar power and heat production via photovoltaic thermal panels for district heating and industrial plant," Energy, Elsevier, vol. 154(C), pages 424-432.
    7. Darghouth, Naïm R. & Barbose, Galen & Zuboy, Jarett & Gagnon, Pieter J. & Mills, Andrew D. & Bird, Lori, 2020. "Demand charge savings from solar PV and energy storage," Energy Policy, Elsevier, vol. 146(C).
    8. Gravelsins, Armands & Pakere, Ieva & Tukulis, Anrijs & Blumberga, Dagnija, 2019. "Solar power in district heating. P2H flexibility concept," Energy, Elsevier, vol. 181(C), pages 1023-1035.
    9. Hau, Lee Cheun & Lim, Yun Seng & Liew, Serena Miao San, 2020. "A novel spontaneous self-adjusting controller of energy storage system for maximum demand reductions under penetration of photovoltaic system," Applied Energy, Elsevier, vol. 260(C).
    10. Saffari, Mohammad & de Gracia, Alvaro & Fernández, Cèsar & Belusko, Martin & Boer, Dieter & Cabeza, Luisa F., 2018. "Optimized demand side management (DSM) of peak electricity demand by coupling low temperature thermal energy storage (TES) and solar PV," Applied Energy, Elsevier, vol. 211(C), pages 604-616.
    11. Eltoumi, Fouad M. & Becherif, Mohamed & Djerdir, Abdesslem & Ramadan, Haitham.S., 2021. "The key issues of electric vehicle charging via hybrid power sources: Techno-economic viability, analysis, and recommendations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    12. Chawin Prapanukool & Surachai Chaitusaney, 2020. "Designing Solar Power Purchase Agreement of Rooftop PVs with Battery Energy Storage Systems under the Behind-the-Meter Scheme," Energies, MDPI, vol. 13(17), pages 1-18, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hanna, Ryan & Ghonima, Mohamed & Kleissl, Jan & Tynan, George & Victor, David G., 2017. "Evaluating business models for microgrids: Interactions of technology and policy," Energy Policy, Elsevier, vol. 103(C), pages 47-61.
    2. Schachter, Jonathan A. & Mancarella, Pierluigi & Moriarty, John & Shaw, Rita, 2016. "Flexible investment under uncertainty in smart distribution networks with demand side response: Assessment framework and practical implementation," Energy Policy, Elsevier, vol. 97(C), pages 439-449.
    3. Hartmann, Bálint & Divényi, Dániel & Vokony, István, 2018. "Evaluation of business possibilities of energy storage at commercial and industrial consumers – A case study," Applied Energy, Elsevier, vol. 222(C), pages 59-66.
    4. Duan, Shuyu & Wen, Tao & Jiang, Wen, 2019. "A new information dimension of complex network based on Rényi entropy," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 516(C), pages 529-542.
    5. Paterakis, Nikolaos G. & Erdinç, Ozan & Catalão, João P.S., 2017. "An overview of Demand Response: Key-elements and international experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 871-891.
    6. Gros, Daniel & De Groen, Willem Pieter, 2015. "Will the Single Resolution Fund be a �baby tiger� during the transition?," CEPS Papers 11192, Centre for European Policy Studies.
    7. Freitas Gomes, Icaro Silvestre & Perez, Yannick & Suomalainen, Emilia, 2021. "Rate design with distributed energy resources and electric vehicles: A Californian case study," Energy Economics, Elsevier, vol. 102(C).
    8. Koskela, Juha & Rautiainen, Antti & Järventausta, Pertti, 2019. "Using electrical energy storage in residential buildings – Sizing of battery and photovoltaic panels based on electricity cost optimization," Applied Energy, Elsevier, vol. 239(C), pages 1175-1189.
    9. Azuatalam, Donald & Paridari, Kaveh & Ma, Yiju & Förstl, Markus & Chapman, Archie C. & Verbič, Gregor, 2019. "Energy management of small-scale PV-battery systems: A systematic review considering practical implementation, computational requirements, quality of input data and battery degradation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 555-570.
    10. Tervo, Eric & Agbim, Kenechi & DeAngelis, Freddy & Hernandez, Jeffrey & Kim, Hye Kyung & Odukomaiya, Adewale, 2018. "An economic analysis of residential photovoltaic systems with lithium ion battery storage in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 1057-1066.
    11. Wang, Zeyu & Negash, Ahlmahz & Kirschen, Daniel, 2015. "Assessing the financial impacts of distributed energy on load serving entities," Energy Policy, Elsevier, vol. 86(C), pages 380-392.
    12. Gopinath Subramani & Vigna K. Ramachandaramurthy & Sanjeevikumar Padmanaban & Lucian Mihet-Popa & Frede Blaabjerg & Josep M. Guerrero, 2017. "Grid-Tied Photovoltaic and Battery Storage Systems with Malaysian Electricity Tariff—A Review on Maximum Demand Shaving," Energies, MDPI, vol. 10(11), pages 1-17, November.
    13. Guarino, Francesco & Cassarà, Pietro & Longo, Sonia & Cellura, Maurizio & Ferro, Erina, 2015. "Load match optimisation of a residential building case study: A cross-entropy based electricity storage sizing algorithm," Applied Energy, Elsevier, vol. 154(C), pages 380-391.
    14. Frida Berglund & Salman Zaferanlouei & Magnus Korpås & Kjetil Uhlen, 2019. "Optimal Operation of Battery Storage for a Subscribed Capacity-Based Power Tariff Prosumer—A Norwegian Case Study," Energies, MDPI, vol. 12(23), pages 1-24, November.
    15. Nguyen, Su & Peng, Wei & Sokolowski, Peter & Alahakoon, Damminda & Yu, Xinghuo, 2018. "Optimizing rooftop photovoltaic distributed generation with battery storage for peer-to-peer energy trading," Applied Energy, Elsevier, vol. 228(C), pages 2567-2580.
    16. Li, Yanxue & Gao, Weijun & Ruan, Yingjun, 2018. "Performance investigation of grid-connected residential PV-battery system focusing on enhancing self-consumption and peak shaving in Kyushu, Japan," Renewable Energy, Elsevier, vol. 127(C), pages 514-523.
    17. O'Shaughnessy, Eric & Cutler, Dylan & Ardani, Kristen & Margolis, Robert, 2018. "Solar plus: A review of the end-user economics of solar PV integration with storage and load control in residential buildings," Applied Energy, Elsevier, vol. 228(C), pages 2165-2175.
    18. Cagnano, A. & De Tuglie, E. & Mancarella, P., 2020. "Microgrids: Overview and guidelines for practical implementations and operation," Applied Energy, Elsevier, vol. 258(C).
    19. Hann, Veryan, 2020. "Transition to decentralised electricity storage: The complexities of consumer decision-making and cost-benefit analyses," Energy Policy, Elsevier, vol. 147(C).
    20. Alhammami, Hasan & An, Heungjo, 2021. "Techno-economic analysis and policy implications for promoting residential rooftop solar photovoltaics in Abu Dhabi, UAE," Renewable Energy, Elsevier, vol. 167(C), pages 359-368.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:108:y:2017:i:c:p:523-532. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.