Storage Degradation Aware Economic Dispatch

TL;DR

This paper presents an optimization framework for economic dispatch that incorporates storage degradation costs using cycle counting, improving profitability analysis for storage and generation units.

Contribution

It introduces a novel cycle-aware dispatch model that explicitly accounts for storage degradation, optimizing profit for generators and storage units simultaneously.

Findings

Storage degradation significantly impacts dispatch profitability.

The proposed model outperforms generation-centric dispatch in simulations.

Optimal storage response is unique under certain market conditions.

Abstract

In this paper, we formulate a cycling cost aware economic dispatch problem that co-optimizes generation and storage dispatch while taking into account cycle based storage degradation cost. Our approach exploits the Rainflow cycle counting algorithm to quantify storage degradation for each charging and discharging half-cycle based on its depth. We show that the dispatch is optimal for individual participants in the sense that it maximizes the profit of generators and storage units, under price taking assumptions. We further provide a condition under which the optimal storage response is unique for given market clearing prices. Simulations using data from the New York Independent System Operator (NYISO) illustrate the optimization framework. In particular, they show that the generation-centric dispatch that does not account for storage degradation is insufficient to guarantee storage profitability.