Time-of-Use Pricing for Energy Storage Investment

Time-of-use (ToU) pricing is widely used by the electricity utility to shave peak load. Such a scheme provides users with incentives invest in behind-the-meter energy storage and shift load towards low-price intervals. However, without considering implication on investment, an improperly designed ToU may lead significant welfare loss, especially when over-invest storage, which leads new consumption peaks. In this paper, we will study how design social-optimum explicitly its impact investment. We model interactions between as two-stage optimization problem. To resolve challenge of asymmetric information due users’ private cost, propose based different types aggregate demand per type. Each user does not need reveal his cost information. can further compute optimal only linear complexity. Simulations real-world data show that suboptimality gap our proposed pricing, compared social optimum achieved under complete information, less than 5%.