Marginal utility of battery energy storage capacity for power system economic dispatch

The battery energy storage (BES) is recognized as a key resource for the power fluctuations smoothing, peak load shaving and frequency regulation, and its performance depends heavily on the available capacity. It is meaningful to investigate the influence of the BES capacity on the power system operation cost. This paper focuses on the marginal utility of BES capacity in the day-ahead power system operation cost. Firstly, the day-ahead economic dispatch problem is formulated as a constrained quadratic programming problem, with the consideration of the BES degradation cost. Then, the relationship between the BES-related shadow prices and the marginal electricity price is derived from the KKT conditions of the dispatch problem. Based on it, the marginal utility of BES capacity is modeled to evaluate the effect of BES capacity on the system day-ahead operation cost. Finally, the numerical results demonstrate that the proposed marginal utility can manifest the influence of BSS capacity on the power system operation.