The Economics of using of Battery Energy Storage System to Reduce Electricity Retailer Imbalance due to PV Output Forecast Error

For improving the profitability of electricity retailers, it is important to reduce the penalty cost for the imbalance between a day-ahead planned electricity demand and the actual electricity demand on the day. To reduce the imbalance, a Battery Energy Storage System (BESS) installed in customers of the electricity retailer can be used. Assuming that the forecast error of Photovoltaic (PV) power output forecast error can be major reason of the imbalance in retailer using a certain amount of its own PV, our previous study proposed the simple operation of BESS based on the prediction of the direction of forecast error (positive or negative) instead of the amount of error, and revealed that the proposed method can be useful if the available BESS capacity is smaller than the imbalance. Based on the results in previous study, this paper conducts the economic assessment of imbalance reduction by the proposed BESS operation by using the actual data on imbalance charges and electricity market prices for a year. Both the change in imbalance cost in daytime and the preparation cost of BESS in night-time for the next day operation are taken into account. Furthermore, the break-even point of the imbalance charges at which this BESS operation method can achieve relatively higher profitability is examined.