Full Title: Deployment of Behind-TheMeter Energy Storage for Demand Charge Reduction
Author(s): J. Neubauer and M. Simpson
Publisher(s): U.S. National Renewable Energy Laboratory (NREL)
Publication Date: 01/2015
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Mandates and subsidies for energy storage, including customer-sited, behind-the-meter installations, are on the rise. Where utilities employ demand charge rate structures, the most economic use of energy storage for customers is often to reduce monthly maximum demand. This study identifies how economically motivated customers will use energy storage for demand charge reduction, as well as how this changes in the presence of on-site photovoltaic power generation, to investigate the possible effects of incentivizing increased quantities of behind-themeter storage. Utilizing historical solar irradiance and demand profiles, we simulate the impact of lithium-ion batteries operated under a peak-shaving control algorithm on electricity costs, then identify cost-optimal battery configurations and their impact on metered load. We find that small, short-duration batteries are most cost-effective regardless of solar power levels, serving to reduce short load spikes on the order of 2.5% of peak demand. While profitable to the customer, such action is unlikely to adequately benefit the utility as may be desired, thus highlighting the need for modified utility rate structures or properly structured incentives.