Storage and network expansion in smart grids

On basis of extensive data on production by solar systems and consumption values of households, we analyzed the willingness of private households to invest in storage capacities and their coordination with the network operation by a regulated distribution network operator. By using a bilevel optimization problem, different alternative market designs can be compared with the results under the current regulatory framework and with the system optimum. The results show a high efficiency potential in distribution networks, which can be realized to a large extent through incentives that influence the short-term behavior of the actors.

  • How can the expansion and operation of storage capacities by private actors be efficiently coordinated with network planning by regulated distribution network operators?

  • What is the efficiency potential and which incentives lead to efficient behaviour of the individual actors?

  • By formulating a bi-level optimization problem, various alternative market rules can be compared with the efficiency under the current regulatory framework.

  • The efficiency potential of the overall system can be determined by comparing the bi-level optimization problem under the current regulatory framework with the system optimum, in which an integrated planner takes all decisions simultaneously.

  • Pure subsidies for storage investments are only suitable to a limited extent for coordination between storage and network operation as long as the network operator has no influence on the operation of the storage.

  • Adjustment of the network charging regime, which charges producers for their highest feed-in in a time period, can lead to a reduction of peak loads in the network and thus avoid network expansion.

  • A high efficiency potential can be realized by efficient curtailment of renewable production.

  • ZAE Bayern

Research team

Prof. Dr. Veronika Grimm

FAU Erlangen-Nürnberg / Chair of Economic Theory

Julia Grübel

FAU Erlangen-Nürnberg / Chair of Economic Theory

Bastian Rückel

FAU Erlangen-Nürnberg / Professorship of Economics (Industrial Organization and Energy Markets)

Dr. Christian Sölch

FAU Erlangen-Nürnberg / Professorship of Economics (Industrial Organization and Energy Markets)

Prof. Dr. Gregor Zöttl

FAU Erlangen-Nürnberg / Professorship of Economics (Industrial Organization and Energy Markets)

Further reference projects