Multi-Period Newsvendor Problem for the Management of Battery Energy Storage Systems in Support of Distributed Generation

Stakeholders’ interests on renewable and clean energy sources experienced a huge increase in the last decades, thanks to the remarkable benefits on climate, economic, and social issues. The integration of flexible energy storage systems represents a great chance for a further increased penetration as they support the mitigation of renewables’ main drawbacks (i.e., stochastic behavior) and guarantee the balance between energy supply and demand enabling non-simultaneous production and consumption. The increased focus on distributed generation and storage was also of interest to the research community which investigated both the economic and technical performances of the integrated systems. The operations management branch addressed this topic, since storage devices present many similarities with traditional inventory management applied to regular commodities. At a user level, the relation between energy production and storage can be studied by analogy with inventory models. Specifically, this study presents a multi-period newsvendor model for the management and optimal sizing of a battery energy storage system installed to increase the self-consumption rate by allowing loads shifting. This work aims to extend the traditional inventory management applying its concepts to energy systems operations in order to minimize the total energy cost. A numerical study is provided to show the behavior of the model.