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Modeling Storage and Demand Management in Electricity Distribution Grids

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  • Andreas Schröder
  • Jan Siegmeier
  • Murk Creusen

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.

Suggested Citation

  • Andreas Schröder & Jan Siegmeier & Murk Creusen, 2011. "Modeling Storage and Demand Management in Electricity Distribution Grids," Discussion Papers of DIW Berlin 1110, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1110
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    References listed on IDEAS

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    1. Lee, Deok Ki & Park, Sang Yong & Park, Soo Uk, 2007. "Development of assessment model for demand-side management investment programs in Korea," Energy Policy, Elsevier, vol. 35(11), pages 5585-5590, November.
    2. Diaf, S. & Diaf, D. & Belhamel, M. & Haddadi, M. & Louche, A., 2007. "A methodology for optimal sizing of autonomous hybrid PV/wind system," Energy Policy, Elsevier, vol. 35(11), pages 5708-5718, November.
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    More about this item

    Keywords

    Storage; demand management; stochastic optimization; Benders Decomposition;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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