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An Optimal Investment Model for Battery Energy Storage Systems in Isolated Microgrids

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Advances in Energy System Optimization

Part of the book series: Trends in Mathematics ((TM))

Abstract

In remote microgrids, the integration of renewable energy sources (RES) is essential to meet the demand in conjunction with the dispatchable fuel-based generation units. The need to facilitate RES efficiently and the very high cost of fuel transportation in these areas make installing battery energy storage system (BESS) an appealing solution. However, the high cost of BESS requires optimizing the BESS technology selection and size to increase their benefits to the microgrid. In this paper, the optimal BESS installation decisions are determined from the perspective of an investor with the objective of profit maximization. The maximum size of BESS that the investor is willing to install for a certain discharge price is determined for various BESS technologies. Also, a new approach to determine the minimum acceptable discharge price at which the installation would make profit for the investor is proposed. Thereafter, the optimal microgrid and BESS operation is determined to minimize the total microgrid costs while meeting its growing demand considering the installation decisions obtained from the proposed investment model.

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Acknowledgements

The first author wishes to acknowledge the funding support to carry out this work received from Taif University, Saudi Arabia, through the Saudi Arabian Cultural Bureau in Canada.

Author information

Authors and Affiliations

  1. Department of Electrical & Computer Engineering, University of Waterloo, Waterloo, ON, Canada

    Hisham Alharbi & Kankar Bhattacharya

Authors
  1. Hisham Alharbi
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  2. Kankar Bhattacharya
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Corresponding author

Correspondence to Hisham Alharbi .

Editor information

Editors and Affiliations

  1. Economic Analysis, The Economic and Social Research Institute, Dublin, Ireland

    Valentin Bertsch

  2. Karlsruhe Institute of Technology, Karlsruhe, Germany

    Wolf Fichtner

  3. University of Heidelberg, Heidelberg, Germany

    Vincent Heuveline

  4. Karlsruhe Institute of Technology, Institute of Electric Energy Systems and High-Voltage Technology, Karlsruhe, Germany

    Thomas Leibfried

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Alharbi, H., Bhattacharya, K. (2017). An Optimal Investment Model for Battery Energy Storage Systems in Isolated Microgrids. In: Bertsch, V., Fichtner, W., Heuveline, V., Leibfried, T. (eds) Advances in Energy System Optimization. Trends in Mathematics. Birkhäuser, Cham. https://doi.org/10.1007/978-3-319-51795-7_7

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