Managing power imbalance with cloud energy storage in imbalance band market environment

Abstract

Abstract Imbalance band market is an alternative to traditional market structures which is proposed to ensure that system frequency remains within acceptable bounds. In an imbalance band market environment, the load‐serving entities (LSEs) can purchase bands or reduce the load deviation by operating a battery energy storage system (BESS) to avoid the penalty for causing imbalance. The market concept would be effective in sharing balancing responsibility between a system operator (SO) and load‐serving entities. In this study, the authors proposed a planning framework for a load serving entity (LSE) considering cloud energy storage (CES) business as a useful resource in the imbalance band market environment. The term of cloud energy storage is used as a platform that the operator owns and operates the storage, while subscribed clients pay a service fee for requesting charging and discharging operations. The simulation results show that operating cloud energy storage business is economically rational strategy for the LSE. The authors verified that a LSE operating the cloud energy storage business under an imbalance band market environment to pursue its own benefit better performs a part of the balance‐maintaining obligation of the SO compared with a LSE not operating the cloud energy storage business.