Impact of battery energy storage systems on energy generation by renewable and non-renewable energy sources

Guide(s)

Sapra, Amar

Department

Production and Operations Management

Area

Production and Operations Management

University

Indian Institute of Management Bangalore

Place

Bangalore

Publication Date

3-31-2025

Year Awarded

March 2025

Year Completed

March 2025

Year Registered

June 2018

Abstract

A renewable energy source (RES), such as wind or solar power plant, usually faces stochastic generation and is, therefore, inherently susceptible to pay balancing penalties that a grid operator imposes to penalize the grid imbalance. In comparison, a non-renewable energy source (NRES), such as coal-powered or gas-powered plant, is a responsive generator that can modify the generation load with a relatively high marginal generation cost that depends on the generation load. A battery energy storage system (BESS) can help to manage energy supply-demand mismatch, and it can be deployed by both an RES and an NRES. A BESS can help an RES manage intermittent energy generation, reduce the balancing penalties, and exploit arbitrage in the energy market. With this background, we investigate four research problems in this dissertation. First, we investigate the optimal BESS usage by an RES participating in the electricity market and facing real-time balancing costs. Using a finite horizon dynamic program, we model the RES’s decisions on bids in the day-ahead market and real-time BESS charge/discharge. We find that the RES would act as an arbitrage seeker, balancer, and aggravator of imbalance. Second, we model the optimization problem of generation cost for an NRES with a BESS. We identify strategies and configurations for the BESS usage by the NRES and determine conditions on generation loads for optimal configurations. We find that the usage of BESS can be highly cost-effective for a highly-responsive NRES. Third, we set up a two-player game between an RES with a BESS and an NRES to study the impact of BESS deployment by the RES on the NRES. We find that the BESS deployment by the RES could lead to a triple whammy for the NRES: profit downfall, higher net emissions, and earning a tag of dirtier source (inflated emissions-per-unit-energy). Fourth, we model the BESS location problem using long-term average energy exchanges, prices, and penalties. We find that the long-term revenue is concave in the location of BESS, which is assumed to be between the RES and the grid. We also identify two lower bounds on the transmission efficiency between the BESS and the grid, based on the long-term energy exchange from BESS, above which the BESS is deployed either at the RES or grid.

Pagination

ix, 133p.

Copyright

Indian Institute of Management Bangalore

Document Type

Dissertation

DAC Chairperson

Sapra, Amar

DAC Members

Hazra, Jishnu; Desai, Jitamitra

Type of Degree

Ph.D.

Relation

DIS-IIMB-FPM-P25-03

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