Theoretical analysis reveals optimal policies for energy management under demand charges, suggesting efficient integration of distributed energy resources.
We address the co-optimization of behind-the-meter (BTM) distributed energy resources (DER), including flexible demands, renewable distributed generation (DG), and battery energy storage systems (BESS) under net energy metering (NEM) frameworks with demand charges. We formulate the problem as a stochastic dynamic program that accounts for renewable generation uncertainty and operational surplus maximization. Our theoretical analysis reveals that the optimal policy follows a threshold structure. Finally, we show that even a simple algorithm leveraging this threshold structure performs well in simulation, emphasizing its importance in developing near-optimal algorithms. These findings provide crucial insights for implementing prosumer energy management systems under complex tariff structures.
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Yang et al. (2025) studied this question.
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