A study of economic evaluation of demand-side energy storage system in consideration of market clearing price

In Japan the electricity market will open on April 1, 2004. Electric utility, Power Producer and Supplier (PPS), and Load Service Entity (LSE) will join the electricity market. LSEs purchase electricity based on the Market Clearing Price (:MCP) from the electricity market. LSEs supply electricity to the customers that contracted with the LSEs on a certain electricity price, and one to the customers that introduced Energy Storage System (:ES) on a time-of-use pricing. It is difficult for LSEs to estimate whether they have any incentive to promote customers to introduce ES or not. This paper evaluates the reduction of LSEs' purchasing cost from the electricity market and other LSEs' purchasing cost by introducing ES to customers. It is clarified which kind of customers has the effect of decreasing LSEs' purchasing cost and how much MCP of the whole power system the demand-side energy storage systems change. Through numerical examples, this paper evaluates the possibility of giving the cost merit to both customers with energy storage systems and LSE by using real data for a year's worth of MCP. (C) 2006 Wiley Periodicals, Inc.