Service pricing and load dispatch of residential shared energy storage unit

Energy storage is playing an increasingly important role in power system operation as a flexible backup asset. At the demand side, it can postpone the upgrade of distribution system infrastructure, such as feeder and transformer, by shaving the peak demand. However, the investment cost of battery storage is still relatively high compared to their service period. In view of the temporal complementarity of energy consumption among different users, shared use of a single energy storage unit is a promising business model in the near future. This paper studies a representative scene of shared energy storage in a residential area and proposes a new method for service pricing and load dispatching in such a circumstance. The service price is determined by the marginal cost of the residential load aggregator, who controls the shared energy storage unit and energy supply for each consumer. Such a pricing scheme is fair to all users. Demand elasticity is also taken into account. Given the interaction between service price and elastic demand, the optimal dispatch is formulated as a fixed-point problem. The existence of an equilibrium solution is discussed, and a sufficient condition for the equilibrium being stable is disclosed. Numerical results based on real load and electricity prices data validate the proposed method. •Establish a new business model for a residential-level shared energy storage.•Refine user load consumption into three components.•Analyze the interaction between the marginal-cost based electricity price and elastic demands.•Optimize the load dispatch through a fixed-point algorithm.•Discuss the existence and stability of equilibrium.