Cost Minimizing Online Algorithms for Energy Storage Management with Worst-case Guarantee

TL;DR

This paper introduces a simple online algorithm for energy storage management in microgrids that minimizes costs under uncertain electricity prices and renewable supplies, providing strong worst-case guarantees without future information.

Contribution

It presents a novel online algorithm with a competitive ratio for energy storage management that works effectively under uncertainty and can incorporate limited future data.

Findings

Achieves near-optimal worst-case performance guarantees.

Performs well in simulations with real-world data.

Adapts to limited future information for improved results.

Abstract

The fluctuations of electricity prices in demand response schemes and intermittency of renewable energy supplies necessitate the adoption of energy storage in microgrids. However, it is challenging to design effective real-time energy storage management strategies that can deliver assured optimality, without being hampered by the uncertainty of volatile electricity prices and renewable energy supplies. This paper presents a simple effective online algorithm for the charging and discharging decisions of energy storage that minimizes the electricity cost in the presence of electricity price fluctuations and renewable energy supplies, without relying on the future information of prices, demands or renewable energy supplies. The proposed algorithm is supported by a near-best worst-case guarantee (i.e., competitive ratio), as compared to the offline optimal decisions based on full future information. Furthermore, the algorithm can be adapted to take advantage of limited future information, if available. By simulations on real-world data, it is observed that the proposed algorithms can achieve satisfactory outcome in practice.