Using energy storage to modify the shape of internally generated demand to fit a prescribed shape for externally presented demand

Abstract

We present methods that can provide a win for both the consumer and the producer of electricity. What distinguishes this paper from most work on demand-side management is our consumer-centric focus: we transform human and other-generated internal demand within the consumer to fit a prescribed shape for demand to be presented to an external utility. We recommend that the utility prescribe the shape. We also explain why setting tariffs by time-of-day, independent of the amount consumed, can put the utility at an economic disadvantage. Key contributions of our paper include (1) the design and exemplary operation of an estimator that selects a battery size likely to make feasible the periodic (e.g., daily) transformation of internal demand into a shape proportional to an input shape; (2) the design and exemplary operation of a system to perform the required reshaping based on various input forecasts and consumption history; (3) the suggestion that energy price discounts should be based on the daily shape of the demand, as opposed to tariffs based on time-of-day but independent of the amount of demand; and (4) a demonstration of the effectiveness of using forecasts to manage demand. We focus on the management of demand for electricity. However, our methods would apply in a variety of industries that use metered services for a commodity that can be stored. These commodities include water, natural gas and other fuels, and some internet services (e.g., streaming and cloud services, especially cloud storage).