Network pricing for customer-operated energy storage in distribution networks

Network pricing is essential for electricity system operators to recover investment and operation costs from network users. Current pricing schemes are only for generation and demand that purely withdraws or injects power from/into the system. However, they cannot properly price energy storage (ES), which has the dual characteristics of injecting and withdrawing power. This paper develops a novel pricing scheme for ESs in distribution systems operated by customers to reflect their impact on network planning and operation. A novel charging and discharging methodology is designed for ESs to respond to time of use tariffs for maximising electricity cost savings. The long-term incremental cost for ES is designed based on future reinforcement horizon and short-term operation cost is quantified by system congestion. Then, a novel pricing scheme for ES is designed by integrating the two costs. The pricing signals can guide ES operation to benefit both distribution network operators and ES owners. The new methodology is demonstrated on a small system with an ES of different features and then on a practical Grid Supply Point (GSP) area.