Impact of storage on load management by utilities

In this paper we study the impact of storage on load management by electric utilities. The results we have obtained are based on a simple model with linear storage costs and quadratic generating costs. Inefficiency of storage is a parameter in the model. An optimal control problem, with state variable and control variable inequality constraints, is formulated. It is shown that the optimal storage/retrieval strategies may be summarized in terms of a "peak line," above which the load curve will be shaved off and a "valley line," below which the load curve will be filled. The control strategy, albeit based on a simple model, makes explicit the role of storage and generation parameters in the planning for the operation of the system.