Impact of Operational Decisions and Size of Battery Energy Storage Systems on Demand Charge Reduction

Demand charge reduction is an influential application of BESS for distribution system utilities as well as microgrid operators that could be achieved through peak-shaving techniques. This paper studies the impact of the size of BESS and the BESS operational decisions including the initial state of charge (SoC) of a day, on peak-shaving. A linear programming-based algorithm is used for optimal energy management of BESS interfaced with Distributed Energy Resources (DERs) to determine the output power of the BESS for peak-shaving and demand charge reduction on each day. The problem is solved using MATLAB and implemented on a real-world distribution feeder modeled in OpenDSS, using predicted day-ahead demand and solar photovoltaic (PV) generation output. The results show that the BESS rated capacity is a more decisive factor than inverter rated power for effective peak shaving strategies. Moreover, a low initial SoC for the day is critical in achieving demand charge reduction.