Deviations from commitments: Markov decision process formulations for the role of energy storage

We study the energy commitment, generation, and storage problem for a wind power producer who can own and operate a battery for different purposes. We consider two main problem settings: In the first setting, the producer may choose to deviate from her commitments based on the latest available information, using the battery to support such deviations. In the second setting, the producer is required to fulfill her commitments, using the battery as a back-up source. We also consider the special cases of these settings with no battery. In these settings, the producer decides how much energy to commit to purchasing or selling, how much energy to generate in the wind power plant, and how much energy to charge into or discharge from the battery. We formulate the producer’s decision-making process as a Markov decision process (MDP) by taking into account uncertainties in the electricity price and wind speed in a market setting where the price can be negative. We analytically compare the total profits of the two main settings. We then conduct data-calibrated numerical experiments to examine the effects of system components, imbalance pricing parameters, negative prices, and wind availability on the system operations and profits. Using the battery to intentionally deviate from commitments rather than to minimize such deviations improves the total profit by 16.5%, while this change in the role of the battery increases the total imbalance by 16 times, on average, in our experiments

The impact of geography on energy infrastructure costs

Infrastructure planning for networked infrastructure such as grid electrification (or piped supply of water) has historically been a process of outward network expansion, either by utilities in response to immediate economic opportunity, or in response to a government mandate or subsidy intended to catalyze economic growth. While significant progress has been made in access to grid electricity in Asia, where population densities are greater and rural areas tend to have nucleated settlements, access to grid electricity in Sub-Saharan Africa remains low; a problem generally ascribed to differences in settlement patterns. The discussion, however, has remained qualitative, and hence it has been difficult for planners to understand the differing costs of carrying out grid expansion in one region as opposed to another. This paper describes a methodology to estimate the cost of local-level distribution systems for a least-cost network, and to compute additional information of interest to policymakers, such as the marginal cost of connecting additional households to a grid as a function of the penetration rate. We present several large datasets of household locations developed from satellite imagery, and examine them with our methodology, providing insight into the relationship between settlement pattern and the cost of rural electrification.Energy planning Energy economics Electrification

Optimization of pumped hydro energy storage systems under uncertainty: A review

This paper provides an overview of the research dealing with optimization of pumped hydro energy storage (PHES) systems under uncertainty. This overview can potentially stimulate the scientific community’s interest and facilitate future research on this topic. We review the literature from various perspectives, including the optimization problem type, objective function, physical characteristics of the PHES facility, paradigm used to capture uncertainty, and solution method adopted. We then identify several research gaps and future research directions for energy researchers. This review highlights the need for developing optimization models such as Markov decision processes that can represent uncertainties in renewable energy sources and electricity markets more accurately, constructing multi-objective models that consider not only economic but also environmental impacts, investigating underrepresented solar-PHES systems and PHES sizing problems, addressing nonlinear characteristics of PHES facilities, and optimizing bidding strategies in sequential or coordinated electricity markets

Optimization of pumped hydro energy storage systems under uncertainty: A review

This paper provides an overview of the research dealing with optimization of pumped hydro energy storage (PHES) systems under uncertainty. This overview can potentially stimulate the scientific community’s interest and facilitate future research on this topic. We review the literature from various perspectives, including the optimization problem type, objective function, physical characteristics of the PHES facility, paradigm used to capture uncertainty, and solution method adopted. We then identify several research gaps and future research directions for energy researchers. This review highlights the need for developing optimization models such as Markov decision processes that can represent uncertainties in renewable energy sources and electricity markets more accurately, constructing multi-objective models that consider not only economic but also environmental impacts, investigating underrepresented solar-PHES systems and PHES sizing problems, addressing nonlinear characteristics of PHES facilities, and optimizing bidding strategies in sequential or coordinated electricity markets