Benefits of Home Energy Storage Utilization: An Australian Case Study of Demand Charge Practices in Residential Sector

There are ongoing industrial practices on promoting demand charge tariffs, a kind of tariff charging the customer’s peak power demand over a billing cycle, in the residential sector. This article provides a comprehensive investigation of the benefits of utilizing home Battery Energy Storage Systems (BESSs) to reduce the demand charge penalty risk for residential customers. This article firstly proposes a dynamic programming-based control scheme for residential BESSs; the control scheme determines the optimal charging/discharging decisions of the BESS over a billing cycle, aiming to minimize the customer’s home energy cost subjected to a certain tariff structure (time-of-use, demand charge, or the combination of the two). This article then conducts a comprehensive evaluation on cost-saving and load re-shaping effects the BESS can bring to residential customers in presence of demand charge tariffs, based on real Australian network tariffs and 8,000+ residents’ energy consumption data collected by the Australian “Smart Grid, Smart City” project. The work in this article is expected to provide useful references to the practice of demand charge tariffs in the residential sector.