Electricity storage in buildings for residential sector demand response: Control algorithms and economic viability evaluation

“Smart grid”-enabled demand response (DR) provides significant opportunities to improve today’s electricity grids’ reliability, efficiency, affordability and security. In contrast to conventional DR, electricity storage in buildings (residential or commercial) can provide essential, flexible and reliable DR service without requiring consumers to operate their appliances on shifted or reduced schedules. With a number of DR tariffs and DR-enabling technologies available (e.g., storage technologies and two-wayinverters), one of the key current barriers for higher penetration of DR is consumers’ understanding of the cost-benefit issue. To address this question, and focusing on the residential sector, we (i) devised an agent-based appliance-level stochastic model to simulate the electricity demand of an average U.S. household; (ii) developed control strategies to shift loads from the peak periods to the off-peak periods (i.e., loadshifting strategy) and to shed the peaks of the power demand loads (i.e., peak reduction strategy); (iii) suggested the potential profits for the consumers, i.e., the reduced electricity cost of the modified demand with realistic tariffs (Con Edison, New York) minus storage costs. We optimized DR operation for the above two DR strategies to maximize the profits for consumers and determined the economic viabilities for a range of traditional and advanced storage technologies. We concluded that annual profits range from $61 to $1365 per year per household by utilizing the loadshifting strategy and from $161 to $1058 per year per household by using the peak reduction strategy. These profits can be achieved without changing the actual consumption patterns of appliances. Of the two DR strategies, the peak reduction strategy can render more storage technologies economically viable.