Multipurpose Strategy for Energy Storage System Based on Capital Asset Pricing Model With Ensemble Approach

Abstract

In this paper, we present a multipurpose operation strategy for the efficient distribution of power to multiple power services from a single battery energy storage system (BESS). The proposed operation strategy uses a modern portfolio theory of financial engineering known as the capital asset pricing model to determine the allocation of BESS discharge power. Using this strategy, it is possible to quantitatively evaluate the expected return and risk in BESS operation and achieve the maximum expected return for the selected acceptable risk. Further, the predictability of the expected return is improved by applying the ensemble approach to the estimation model of the expected return. A one-year long performance test was conducted at the Japan Electric Power Exchange using the proposed operation strategy. A mean absolute error of approximately 2.0% between the expected return of the proposed strategy and the actual return was obtained, confirming the accuracy of the proposed strategy.

Keywords

• Batteries
• operations and management
• portfolios
• CAPM
• ensemble approach