Optimal Control for Electricity Storage Against Three-Tier ToU Pricing

The emerging sharing economy has deeply changed our daily lives. Recently, there has been an increasing interest in exploiting the new business models in electricity sector. Most existing research focused on the arbitrage against two-tier Time-of-Use (ToU) pricing (namely, the ToU pricing only contains peak period and off-peak period). A simple greedy control policy can achieve the optimal performance. However, this greedy approach cannot be straightforwardly generalized to other types of ToU pricing. In this paper, we consider the optimal control policy for electricity storage to enable arbitrage against various three-tier ToU pricing. We offer both explicit expressions for the control policies and their economic insights. We believe our work is an essential attempt to exploit the possible opportunities for sharing economy in the electricity sector and will sharp our understanding on the impacts of three-tier ToU pricing.