Decentralized on-site optimization of a battery storage system using one-way communication

Intermittent renewable energy sources (e.g. wind, solar energy systems) have been providing an exponentially growing share of electricity generation. Due to their highly transient and stochastic nature, they pose substantial challenges for power grid operation. Power dispatched from these sources are uncontrolled and do not necessarily coincide with demand; this in turn affects power quality. Hence, extensive demand side management (DSM) is required. DSM relies on flexible loads as well as energy storage facilities. Furthermore, renewable power generation is by its very nature highly distributed and consists of large numbers of small units. These have a substantial effect on traditional power grid operation and electricity pricing patterns. In this paper, a concept of unidirectional, decentralized, onsite optimization of a battery storage system is presented. A mathematical model of the battery storage system is used to simulate battery dynamics. Battery operation is driven by an optimization procedure, which relies on a one-way communicated pseudo-cost function (PCF). Currently, day-ahead stock market electricity prices are used as the PCF. Optimal operation of the battery is carried out by finding a control function that minimizes the pseudo costs, or maximizes profits.