Novel Planning and Market Models for Energy Storage Systems in Smart Grids

The increasing deployment of distributed generation, especially renewable-based due to feed-in-tariff programs, has led to a revolution in the use of distribution systems and the emergence of smart-grid concepts. Smart grids are intended primarily as a means of facilitating the integration of renewable energy sources and of achieving greater system reliability and efficiency. Energy storage systems (ESSs) offer a number of benefits that can help utilities move toward achieving those goals. However, ESSs are very expensive in capital and operation costs. Consequently, utilities are very conservative in deploying ESSs into their networks because they are not certain about the economic benefit of integrating ESSs into their networks over their high costs. The research work presented in this thesis addresses this barrier through analysis and quantification of the potential benefits of installing ESSs for distribution companies, thus increasing the interest of adopting ESSs in distribution networks. Moreover, this thesis aims to investigate the impact of integrating large-scale ESSs on electricity markets. The first goal of this thesis is to develop a comprehensive planning framework for allocating distributed storage (DS) units in distribution networks in order to achieve several benefits that include improving distribution system reliability, deferring network upgrades, and making benefit of the price arbitrage. The use of DS allows for successful islanding operation, thus preventing loss of load or minimizing the loss of energy supplied to non-affected customers during network disturbances. Moreover, the application of DS helps in shifting the peak demand into off-peak times, thus deferring the network upgrades. On the top of that, charging and discharging the DS units during off-peak and peak times, respectively, represents another benefit due to the price arbitrage between those different times. In this framework, the installation and maintenance costs of DS units are optimized with respect to the economic value of the benefits mentioned above. The output of the planning framework is the optimal size and location of DS units to be installed, the optimal operation of DS at each load state, and the load points to be shed during contingencies. The second goal of this thesis is to present a mathematical model for determining the optimal operation of ESS as well as the market prices in a perfectly competitive environment. Controlling ESS operation usually depends on electricity-market prices so as to charge when the price is low and discharge when the price is high. On the other hand, the market-clearing price itself is determined based on the energy storage output. The problem is formulated as a mixed complementarity problem. The proposed model is useful for power system operators dealing with large-scale ESSs at their networks. Furthermore, the impact of energy storage size and location on market price, total generation cost, energy storage arbitrage benefit, and total consumer payment is investigated using the model proposed