2018 International Conference on Computing, Mathematics and Engineering Technologies – iCoMET 2018

Benefits of Distributed Energy and Storage System in

Smart Grid Prosumer Based Electricity Market
Hafiz Abdul Muqeet*, Aftab Ahmad, Intisar Ali Sajjad, Rehan Liaqat, Aamir Raza, Muhammad Muzaffar Iqbal
Department of Electrical Engineering
University of Engineering & Technology
Taxila Pakistan
[email protected]
*Corresponding author

Abstract— Energy crisis, economic and environmental

concerns have led the way to prosumer-based electricity market
where consumers and utilities can participate in market
operations for economic benefits. Distributed energy resources
and energy storage on prosumer facilities can provide significant
financial savings for the consumer and grid support for the
utilities. This paper presents three scenarios of a consumer: (i)
with only gird power (ii) with energy storage system (ESS) and
photovoltaic generation (PV) generation along with grid power
(iii) with ESS, PV and wind generation along with grid power.
Linear programming is used for scheduling ESS of the prosumer
in time of use (TOU) based tariff connection from the grid.
MATLAB is used for simulation purposes. The results show
significant savings in the energy cost paid by the prosumer with
energy storage and distributed generation.
Keywords—distributed generation; energy storage; energy
management; linear programming; prosumer; time of use
NONENCLATURE
𝐸𝑆
𝐶 Capacity of Energy Storage System (kWh)
𝐽 Total Operation Cost ($) Fig.1. Combination of power and communication
𝑃𝑡𝑔 Import Power from grid (kW)
𝑃𝑡𝐿 Demand of Prosumer (kW)
𝑃𝑡𝑃𝑉 Generation of PV (kW) real time monitoring and control for demand response (DR)
𝑃𝑡𝑤 Generation of Wind Power (kW) programs [1]. The advanced communication system in smart
𝑃𝑡𝐸𝑆𝑆 Power of Energy Storage System (kW) grid makes it more autonomous during fault conditions [2]. Fig.2
𝑅𝑡 Unit Price of Electricity at tth Time Interval ($/kWh) highlights different functions of smart grid.
𝑆𝑂𝐶𝑡 State of charge level of ESS (%)
𝑆𝑂𝐶0 Initial level of SOC (%)
𝑡 Hourly time interval (h)

I. INTRODUCTION
Energy crises are a worldwide problem. The demand for energy
is increasing with the passage of time. Due to high cost of fossil
fuels, their depleting nature and environmental threats has
opened the doors for alternate green forms of energy. Wind and
solar energy has gained much attention among renewable energy
resources (RERs). The concept of smart grid has also accelerated
the pace of renewable integration. In convention grid, energy is
transmitted in one direction only, whereas in smart grid, energy
can transmit in both directions. Smart grid is a reliable intelligent
grid in which all system components such as generation,
distribution, transmission and loads communicate with other for
smart operations as shown in Fig. 1.
Smart meters are an integral part of smart grid-based electricity
market. These meters serve not only for net billing but also for

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 Fig. 2. Smart grid functions II. RELATED WORK
In this part a related literature review is presented. In [15],
The transition from centralized generation to distributed presented the energy management using model predictive
generation has favored since two decades [3]. In RERs, solar control (MPC). The PEV, storage system, and loads were also
photovoltaic (PV) energy and wind energy are important sources
analyzed. The prosumer’s energy bill minimization was the
of energy. Smart grid net metering environment has also made
it possible to integrate large number of small-scale distributed main objective of paper. The linear model was presented
generation in the system. As customers can connect their own considering the constraints such as power balance, energy
generation with the system, there may be the time instants where storage system, PEV, power of plannable loads, no arbitrage
they have surplus amount of energy. In those times, they can sell constraints. The controllers were also applied in proposed
their energy to the grid through net metering. In new electricity prosumer nodes. The main purpose of controller was to control
paradigm, consumer terminology is changed to prosumer [4]. A the state of charge of storage system and economic model. In
prosumer is a consumer which can buy from the grid in high [16], introduced the optimal scheduling of prosumer based
demand time and sell to the grid in low demand time [5] as
shown in Fig.3. If multiple consumers are supporting the grid, energy storage system. The scheme that introduced was used to
they can have significant impact on grid stability. Big data and coordinate the day ahead arrangement and corrective action for
intelligent data processing will also be required such prosumer optimal operation. The grid connected industrial complex-based
communities. Authors of [6] have discussed behavior of environment for prosumer market of south Korea is presented.
prosumer loads. Their other roles such as environment The quadratic programming method, interior point convex
interaction, protection, and prosumers management were algorithm was used to analyses the system. The state of charge
discussed in [7] considering the social technical effect on smart (SOC) of battery was discussed for prosumer maximum profit
grid.
and minimum operation cost. The corrective action was used in
Prosumers can get economic benefits with integration of their the case of grid support mode. It re-optimizes the system and
self-generation resources with the grid [8]. Role of energy update the historical profile.
storage system (ESS) is also vital in management of prosumer
based electricity markets [9] . ESS can support the grid in case In [17], authors presented the optimal scheduling of PV plants
of peak times and emergencies and can support the prosumer in in electricity market. The profit maximization was proposed in
case of grid connectivity loss and absence of renewable energy daily and intraday electricity market. MPC was used to solve the
generation. Significant research had been carried out in literature
proposed problem. The analysis was taken to find the optimal
for proper scheduling of ESS in the system. Optimal scheduling
of energy storage system was presented in [10] to minimize the scenarios of using the battery storage system. It founds that the
operational cost of the system. The reliability and aging of energy storage benefits depends on the real time hourly price. A
energy storage were also discussed in [11]. The scheduling of sensitivity analysis was also performed to find the optimal
storage system was presented to enhance the microgrid storage system sizing. Different scenarios were also analyzed,
efficiency. The energy storage system reduced the operational such as clear day, cloudy day, and clear day with unexpected
cost of the grid. The demand energy gap reduced in [12], using clouds. The results showed the significant of storage system in
linear programming of five prosumers. In this paper, cost
PV plant that increased the profit.
effective model is proposed to minimize the bill. The solar PV
and energy storage are integrated. The system is analyzed on Authors of [18] discussed the trading between utility and
MATLAB and using linear programming. A detailed linear
prosumers using a stochastic approach. Different types of
programing solved in [13] with solved examples. The impact of
prosumers on stability future power gird is analyzed in [14] . scenarios were discussed such as day ahead forecast, and
coordination of both entities. The authors focused on wind
The remaining paper is arranged as: section II discusses the energy system and its impact on the system. In [19], the authors
related work and proposed model is presented in section III.
analyzed the market model of prosumers. The bi-level
Simulation and results are analyzed in section IV. In section V,
conclusion and future work are presented. optimization was applied to Australian national grid system. In
[20], authors compared the electricity bills of both countries:
Italy and Spain. There were differences between the bills of both
countries. The Spanish bill was lower than Italians. If considered
the renewable sources, the Spanish bill was high. The analysis
was taken with and without the PV and storage system. However
Spanish bill was increased if both PV and storage were
considered.

In [21], presented the solution of load variance in in battery

storage system. As the load variation is a problem of utility
companies due to increase its operational cost. The power flow
Fig.3. Role of prosumer
model of radial distribution network is also described to achieve

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the point of common coupling. In [22], discussed the importance objective equation can be expressed as subject to following
of micro grid to enhance the smart grid. The three categories of constraints (2)-(8).
micro grid were presented for better solution. These three 𝑔
categories are AC DC and hybrid micro grids. The functions of 𝐽 = 𝑚𝑖𝑛 ∑24
𝑡=1(𝑃𝑡 )𝑅𝑡 (1)
smart 14 grid were also discussed in detail. At the end, micro
Equations (2) is the power balance and equality constraint
grid technical challenges and opportunities were also analyzed
equation. Equation (3) is inequality constraint related to grid
for future work. In Christopher O. Adika et al. [23], demand side
power lemmatization. The prosumer required power which is
bidding strategy for the energy management system was
buy from grid or prosumer surplus power which is sell to the grid
discussed for residential customers. The filling water algorithm
are bounded by these constraints which are shown in equations
was used by utility to determine the load profile of customers. In
(2) and (3). The Power cannot import and export other than these
[24], a detailed study has given on renewable energy utilization,
their techniques and its benefits in micro grid. limits.
𝑔
𝑃𝑡 + 𝑃𝑡𝑃𝑣 + 𝑃𝑡𝑤 +𝑃𝑡𝐸𝑆𝑆 = 𝑃𝑡𝐿 (2)
The proposed system was intelligent energy management for
smart grid. The bidding 17 strategy that was optimal for both 𝑔 𝑔 𝑔
𝑃𝑚𝑖𝑛 ≤ 𝑃𝑡 ≤ 𝑃𝑚𝑎𝑥 (3)
utility and consumers. The reliability was also achieved through
this proposed work. The integration of renewable energy The energy storage system is bounded by equation (4) . The full
resources was possible by using above mentioned technique. discharge of energy storage also damaging the system.
The proposed model of whole system is shown in Fig. 4. The Therefore, charging and discharging of energy storage are also
utility can export and import the energy during the day. The bounded by equations (5) and (6).
prosumer stores energy at off peak hours and discharge at peak
hours. The main purpose of this paper is to reduce the Prosumer 𝐸𝑆𝑆
𝑃𝑚𝑖𝑛 ≤ 𝑃𝑡𝐸𝑆𝑆 ≤ 𝑃𝑚𝑎𝑥
𝐸𝑆𝑆
(4)
bill by RER and storage system.
𝑆𝑂𝐶𝑡−1 −𝑆𝑂𝐶𝑚𝑎𝑥
100
× 𝐶 𝐸𝑆 ≤ 𝑃𝑡𝐸𝑆𝑆 (5)

𝑆𝑂𝐶𝑡−1 −𝑆𝑂𝐶𝑚𝑖𝑛
𝑃𝑡𝐸𝑆𝑆 ≤ 100
× 𝐶 𝐸𝑆 (6)

The state of charge is used to describe that how much the battery
is charged. The state of charge shows the current state of energy
storage. The state of charger represented in percent (%) and
calculated by using the equation (7). Equation (8) is used to
limiting the state of charge within its allowable range.
100×𝑃𝑡𝐸𝑆𝑆
𝑆𝑂𝐶𝑡 = 𝑆𝑂𝐶𝑡−1 − (7)
𝐶 𝐸𝑆

𝑆𝑂𝐶𝑚𝑖𝑛 ≤ 𝑆𝑂𝐶𝑡 ≤ 𝑆𝑂𝐶𝑚𝑎𝑥 (8)

The final constraint (9), presents the situation of optimal

scheduling. The next day energy storage starts its scheduling
through this level.
𝑆𝑂𝐶24 = 𝑆𝑂𝐶0 (9)

The price of electric supply is shown in table I. The off-peak

time and peak time prices are analyzed. The electricity prices
Fig. 4. System architecture for the Korean Utility are given in Table I [25].

III. PROPOSED MODEL TABLE I. ELECTRICITY PRICE

In our proposed model, the prosumer sells its surplus energy to Time (h) Price Time (h) Price
utility to reduce the energy bill. At peak time the prices of ($/kWh) ($/kWh)

Electric energy increase as compared to off peak hours. In this 0:00 to 1:00 0.0964 14:00 to 15:00 0.0964
section, we propose a mathematical representation about the 1:00 to 11:00 0.0584 15:00 to 19:00 0.1489
optimal scheduling goal: electricity cost payment minimization.
11:00 to 12:00 0.0964 19:00 to 24:00 0.0964
Most of the related literatures regard the cost payment
minimization as the basic scheduling objective, and the basic 12:00 to 14:00 0.1489

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In following Table II describes the parameters which bounded common in all over the world. But the next cases include the
the variables. distributed generation and energy storage system for reducing
the above running cost.
TABLE II. PARAMETERS FOR PROPOSED MODEL
Parameters Value Parameters Value Case II: Grid Connected system with PV and ESS
𝑃𝑡𝑃𝑉 𝑟𝑎𝑡𝑒𝑑 600 kW 𝑃𝑡𝑤 rated 100kW In this case, PV power generation are integrated with the
𝑔 𝑔
𝑃𝑡,𝑚𝑎𝑥 2000 kW 𝑃𝑡,𝑚𝑖𝑛 -2000 system. The prosumer has its generation and storage. The PV
kW
𝐸𝑆𝑆
𝑃𝑡,𝑚𝑎𝑥 100 𝐸𝑆𝑆
𝑃𝑡,𝑚𝑖𝑛 -100 data as shown in Fig.5 were used for this case. The PV started
𝑆𝑂𝐶𝑚𝑎𝑥 90% 𝑆𝑂𝐶𝑚𝑖𝑛 10% its generation about 9:00, and lasting about 19:00. Rated power
𝑆𝑂𝐶0 50% SOC24 50% of PV system is 600kW. The maximum output power of that
𝐶 𝐸𝑆 100 kWh PV system is 450kW at time 15:00 to 16:00.

Case studies are given in next section with results and In this case II in which the prosumer has its own generation and
comparison. storage system the operational cost obtained $ 305.2625 per
day. The results of case II are shown in Fig. 6. The cost of this
IV. SIMULATIONS AND RESULTS case shows that the prosumer reduced their electricity bill
The proposed system is analyzed neglecting the installation nearly 52 % per day from the Case I.
cost. The PV output power,wind output power, price rate and
load data is taken from [26], shown in Fig. 5.

Fig. 6. Case 02 Output results (a) Exchange power of grid (b) Output power
of ESS (c) State of charge level of ESS.

Fig. 5. Input values (a) Electricity price (b) Solar PV output power (c) Load Case III Grid Connected system with PV, Wind and ESS
of prosumer (d)Wind output power
In this case, prosumers have PV, wind power generation and
By using the above input data different cases are analyzed with ESS. The PV and wind power data which is shown in Fig. 5
the help of Linear Programming in MATLAB to find the were used for this case. Rated power of PV and wind systems
optimal operation of system. are 600kW and 100 kW respectively. The linear programming
based optimal scheduling was used to find the optimal cost. The
Case I: Power from Grid to Consumer
battery charging and discharging pattern was also considered.
In this case, power import from grid. The consumer utilizes At peak time 17:00 to 20:00, discharging should be maximum
only grid power. The consumer load shown in Fig. 5. Based on and there is no charging in that time slot. The prosumer sold its
this data, we performed the grid to consumer analyses and surplus storage power to utility grid as shown in Fig. 7. In this
calculated the total operation cost of a day. The calculated Case III, we used the Grid Connected system with PV, wind and
operational cost in this case was $ 631.9315 per day. This type ESS, the total operational cost obtained was $ 202.724 per day.
of generation and consumption is conventional which is

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The cost of this case shows that electricity bill of the prosumer
was reduced by 51.69 % from the Case II and 67.91 % from Comparison of Prices
Case I. The results of case III are shown in Fig. 7. The state of
charge revealed the energy storage level at each stage as shown Case I Case II Case III
in Fig. 7 (c). The output power of energy storage is also
100
mentioned in Fig. 7(b).
50

$
0
1 3 5 7 9 11 13 15 17 19 21 23
-50
HOURS

Figure 8. Comparison of prices in different cases.

VI. CONCLUSION
The study indicates that distributed energy resources and
distributed energy storage at prosumer facilities can benefit
both the prosumer and utilities. Prosumer can achieve
significant monetary benefits in energy cost by proper
management of ES option. Charging of batteries is beneficial
during the renewable-rich time or off-peak time and
discharging is beneficial in peak hours for both prosumer and
grid support . In this study a reduction of 67.91% is observed
by integrating the ESS with PV, wind energy and grid. Hence
proper management of ESS resources is very vital for due
benefits.

In this study, energy storage is managed using a linear objective

function. More complex functions and constraints would be
Fig. 7. Case 03 Output results (a) Exchange power of grid (b) Output power of
addressed in future work. Management and control of
ESS (c) State of charge level of ESS.
appliances in a smart home can also be encompassed in the
V. COST COMPARISON objective function for further savings in the operating cost of
The net benefit of prosumer is compared in Table III. The energy.
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