Article

Peak Shaving with Battery Energy Storage Systems in

Distribution Grids: A Novel Approach to Reduce Local and
Global Peak Loads
Daniel Kucevic * , Leo Semmelmann , Nils Collath , Andreas Jossen and Holger Hesse

Institute for Electrical Energy Storage Technology, School of Engineering and Design, Technical University of
Munich (TUM), 80333 Munich, Germany; [email protected] (L.S.); [email protected] (N.C.);
[email protected] (A.J.); [email protected] (H.H.)
* Correspondence: [email protected]

Abstract: The growing global electricity demand and the upcoming integration of charging options
for electric vehicles is creating challenges for power grids, such as line over loading. With continu-
ously falling costs for lithium-ion batteries, storage systems represent an alternative to conventional
grid reinforcement. This paper proposes an operation strategy for battery energy storage systems,
targeted at industrial consumers to achieve both an improvement in the distribution grid and electric-
ity bill savings for the industrial consumer. The objective is to reduce the peak power at the point of
common coupling in existing distribution grids by adapting the control of the battery energy storage
system at individual industrial consumer sites. An open-source simulation tool, which enables a



realistic simulation of the effects of storage systems in different operating modes on the distribution


grid, has been adapted as part of this work. Further information on the additional stress on the
Citation: Kucevic, D.;
storage system is derived from a detailed analysis based on six key characteristics. The results show
Semmelmann, L.; Collath, N.;
that, with the combined approach, both the local peak load and the global peak load can be reduced,
Jossen, A.; Hesse, H. Peak Shaving
while the stress on the energy storage is not significantly increased. The peak load at the point of
with Battery Energy Storage Systems
common coupling is reduced by 5.6 kVA to 56.7 kVA and the additional stress for the storage system
in Distribution Grids: A Novel
Approach to Reduce Local and Global
is, on average, for a six month simulation, period only 1.2 full equivalent cycles higher.
Peak Loads. Electricity 2021, 2,
573–589. https://doi.org/10.3390/ Keywords: battery energy storage system; lithium-ion; grid-integrated energy storage; peak shaving;
electricity2040033 distribution grid; peak load reduction

Academic Editor: Andreas Sumper

Received: 28 September 2021 1. Introduction

Accepted: 4 November 2021
The steadily increasing demand for electrical energy is leading to new challenges
Published: 15 November 2021
for the power grid [1]. The grid infrastructure must be tailored to tolerate the peak load
conditions and grid operators must ensure this [2]. Conventional grid reinforcement
Publisher’s Note: MDPI stays neutral
or transformer upgrading, as investigated by Brinkel et al., is one possible solution for
with regard to jurisdictional claims in
covering the increasing demand or to enable the integration of more electric vehicles [3].
published maps and institutional affil-
However, with falling costs of lithium-ion batteries (LIBs), stationary battery energy storage
iations.
systems (BESSs) are becoming increasingly attractive as an alternative method to reduce
peak loads [4,5].
The peak shaving field has seen an increasing interest in research during the last years.
Oudalov et al. were among the first to introduce a BESS sizing methodology and operation
Copyright: © 2021 by the authors.
strategy to reduce the peak load of an industrial customer, thereby reducing its total
Licensee MDPI, Basel, Switzerland.
electricity bill. Since grid operators in many jurisdictions charge large-scale consumers
This article is an open access article
for their highest power demand, it can be economically viable to install a BESS and
distributed under the terms and
discharge it when a certain power threshold is surpassed. The objective for optimal
conditions of the Creative Commons
BESS operation is to maximize the profit of the peak shaving operations with respect to
Attribution (CC BY) license (https://
the shaved power, battery cycles per year, battery lifetime, and the power demand fee.
creativecommons.org/licenses/by/
4.0/).
The optimal trajectory of BESS charging and discharging events-resulting from the peak

Electricity 2021, 2, 573–589. https://doi.org/10.3390/electricity2040033 https://www.mdpi.com/journal/electricity

Electricity 2021, 2 574

shaving operating strategy-is retrieved through dynamic programming. In their work,

electricity bill reduction to the amount of 8% was reached through a lead-acid based BESS.
However, in this study the focus was on the optimization of the BESS and the economic
effects and not on the possible grid relief achievements through the peak shaving strategy
on the distribution grid. [6]
In the study of Mamun et al. the management of a lithium-ion based BESS was
optimized in order to maximize peak shaving-induced electricity bill savings while mini-
mizing battery degradation [7]. The focus here was on modeling the battery degradation
mechanisms and the economic benefits and again not on the effects on the distribution
grid. In the study of Tiemann et al. a large-scale peak shaving profitability analysis of more
than 5300 industrial customer load profiles in Germany was conducted [8]. The authors
also came to the conclusion that the peak shaving technology yields the highest profits,
compared to other battery use cases. Furthermore, the authors state that in many cases
minimal payback periods for peak shaving operations can be reached. This is supported by
the work of Martins et al., who concluded that peak shaving is already profitable in many
cases for industrial customers in Germany [9].
While most peak shaving related works are focused on industrial end-customer use
cases, some recent works also highlight the possible benefits of the approach for the grid.
For instance, in the work of Danish et al. a BESS located in a distribution grid was optimized
in order to find the optimal size, location, and control strategy. The work was based on
a 20 kV distribution grid in Kabul with 22 buses and the authors have concluded that an
optimally placed BESS with a peak shaving operation strategy can significantly improve
the system performance and power losses can be reduced up to 20.62% [10].
However, none of these studies investigated the effects of multiple BESSs located
at various industrial consumers, including accurate co-simulations of both a BESS and a
distribution grid. Furthermore, the potential of coupled energy management strategies has
not yet been analyzed in order to achieve both an improvement in the distribution grid as
well as electricity bill savings for industrial consumers.

1.1. Scope of the Study

This study shows different operation strategies for a number of stand-alone BESSs to
reduce the local peak load (Strategy α) or the peak load at the point of common coupling
(β) or both (γ). The BESSs located at various nodes in an example grid are economically
optimal sized using a linear programming approach. First, these storage systems are
operated with a state-of-the-art peak shaving strategy. In the second step, the identically
sized BESSs are used and a centralized control approach is chosen to reduce the peak load
at the point of common coupling (PCC). Finally, in a new approach introduced in this study,
these two approaches are combined in order to achieve both a local and a global peak load
reduction. This scope of the study is condensed as a graphical overview in Figure 1. The
paper can be summarized as follows:
• With accurate co-simulations of BESSs and distribution grids, results for various
operation strategies aiming to reduce both the local peak load and the global peak
load are acquired.
• The storage systems are economical optimally sized using linear optimization.
• These storage systems are operated with a state-of-the-art peak shaving strategy
as well as with a centralized approach and compared according to the peak load
reduction at a specific node and the PCC.
• A newly combined approach is developed aimed to reduce the peak power at the
PCC in an example distribution grid while not significantly influencing the peak load
reduction for the individual industrial consumer.
• The stress on the storage system for the various operation strategies is derived from a
detailed analysis based on six key characteristics.
Electricity 2021, 2 575

Battery energy storage system Operation strategies

State-of-the-art
peak shaving (α)
Communication line
Grid-centered
Power line approach (β)
HV/MV
Combined
(PCC)
approach (γ)

MV grid

MV/LV MV/LV MV/LV MV/LV

LV grid

Figure 1. Graphical overview of the simulated grid and battery energy storage systems (BESSs), as
well as the investigated operation strategies. The BESS, modeled in detail, located at various nodes
in a test grid, is operated in three different operation strategies to reduce the local peak load (Strategy
α) or the peak load at the point of common coupling (β) or both (γ).

1.2. Outline of the Paper

The remainder of this paper is structured as follows: Configuration of the grid and the
BESS as well as the simulation settings are described in Section 2. Section 3 describes the
methodology of this study, including a mathematical and graphical representation of all
three energy management strategies used. The results of the simulations are presented and
discussed in Section 4, while Section 5 concludes the paper with an outlook on potential
directions of future work.

2. Simulation Settings and System Configurations

This section describes the simulation tools applied as well as the example grid used
and the BESSs settings. To analyze the behavior and the effects on the distribution grid of
storage systems, accurate simulations of BESSs and distribution grids are necessary. Figure
2 shows an overview of all simulation tools used in this work, which are all available
open-source (open_BEA and SimSES: https://www.ei.tum.de/en/ees/research-teams/
team-ses/system-analytics-and-integration/, accessed on 2 November 2021; eDisGo:
https://github.com/openego/eDisGo, accessed on 2 November 2021). All settings, such
as the selection of the grid, the simulation duration, and the operation strategy are defined
within open_BEA. A further description of open_BEA can be found in [11]. In this work,
open_BEA is used to analyze the effects of novel operation strategies for BESSs on the peak
load at the PCC in a distribution grid.
Electricity 2021, 2 576

Simulation settings (e.g.,

grid selection)
open_BEA

Initial power flow analysis

Battery energy storage

systems integration
open_BEA

Battery energy storage

system validation

Power flow analysis with

battery energy storage
systems

Result analysis and

visualization
open_BEA

Figure 2. Overview of all open-source simulation tools, which have been adapted for use in this
study. The open_BEA tool operates as both a central control unit and as a configuration unit. The
eDisGo tool conducts the power flow analysis and SimSES operates as a validation unit for the battery
energy storage systems’ behavior.

In addition to the specification of the test grid and the operation strategies (α − γ) of
the BESSs, individual load demands are assigned to the various actors in the grid within
open_BEA. Based on these load demands for residential or industrial consumers, the
eDisGo software performs a power flow analysis for a selected period. In this step, the
power flow analysis is conducted without storage systems. This allows determining the
power flows at all specific nodes and lines for the entire simulation period. These power
flow results as well as the power at the PCC are transferred back to open_BEA for the next
simulation step. Based on the power flow results, the dis(-charging) strategy for each BESS
is calculated according to the selected operation strategy (cf. Section 3).
The main task of SimSES is to validate the effects of the target power provided by the
energy management system of the open_BEA tool regarding efficiency, temperature, and
degradation of the BESS when applied to the storage system. Each implemented compo-
nent, such as the power electronics unit or the battery type, is responsible for modeling
its relevant principles [12]. SimSES can be split into a simulation part for modeling the
physical behavior of the BESS and an evaluation part that provides technical results for
this study. The validated BESS time series are now included in the grid and an additional
power flow analysis is conducted with eDisGo and the results are fed back to open_BEA
for further analysis and visualization.

2.1. Example Grid and Denotations

As our aim is to investigate the effects of various BESS strategies on the distribution
grid, an example grid including an open loop medium voltage (MV)-grid with 146 under-
lying low voltage (LV)-grids is used. The exemplary grid is connected to the overlying grid
level through a single substation (PCC). This grid was chosen because of its resemblance to
the typical German grid structure [13]. A graphical representation is shown in Figure 3 in
which the circuit breakers are marked in gray, the 146 MV/LV transformers in light blue,
the PCC in red, and all branch tees in dark blue.
Electricity 2021, 2 577

PCC Low voltage grids

Circuit breakers Branch tee

Figure 3. Graphical representation of the test distribution grid. The open circuit breakers are marked
in gray, the MV/LV transformers are marked in light blue, the PCC in red, and all branch tees in
dark blue.

The distribution grid includes 72 industrial consumers with an annual load above
100 MWh. Only these end-users can potentially benefit from applying peak shaving
through a BESS as described in Section 3.1. Equation (1) defines the vector N for all
industrial consumers b within the described distribution grid, with a total number of
nodes B:
N = [1, · · · , b, · · · , B]T (1)
The current time step t within a defined time horizon T is defined by a vector H as shown
in Equation (2):
H = [1, · · · , t, · · · , T] (2)
Finally, the apparent power Sbt at each node b for each time step t is defined by a
matrix S (Equation (3)). The individual load profiles for these industrial consumers as well
as all other consumers in the grid are according to a former publication [14].

S11 · · · S1t · · · S1T

 
 .. .. .. .. .. 
 . . . . . 
 
S= b · · · Sbt · · · SbT  (3)
 S1 
 . .. .. .. .. 
 .. . . . . 
SB1 · · · SBt · · · SBT

2.2. Battery Energy Storage System Setting

As described in the previous section, the SimSES simulation tool is used to validate the
behavior of the BESS and to obtain detailed insights of the stress of the storage system. The
parameters and settings shown in Table 1 are used in this paper to represent and simulate
a realistic BESS. For the battery, a LIB with a lithium-iron-phosphate (LFP) cathode and
a carbon/graphite (C) anode is selected [15]. This type of cell is particularly suitable
for stationary applications due to its higher cycle durability [16]. The power electronics
(AC/DC converter) is modeled by a constant load-independent part and a second part,
including all load-dependent losses [17]. The maximum efficiency with this converter type
is attained at 0.46· Prated with an efficiency of η PE = 96.9%. In accordance with the type of
battery cell, the maximum erate is set to 1 h−1 .
Electricity 2021, 2 578

Table 1. Parameters and settings of the simulated battery energy storage system (BESS) comprising
battery cells, a power electronics unit, and a battery management system (BMS).

Parameter/Setting Description/Value Unit

Battery cell manufacturer Murata -
Battery cell type US26650FTC1 -
Battery cell chemistry LFP:C -
Battery cell capacity 2850 mAh
Nominal cell voltage 3.2 V
Cell voltage range 2–3.6 V
Maximum efficiency of power electronics 96.9 %
Maximum erate 1 h−1
Starting state of energy (SOE) 100 %

2.3. Simulation Setting

All results shown in this study are based on a simulation duration of six months,
which represents a tradeoff between seasonal fluctuation and computation time, and a
simulation step size of 15 min. The 15-minute time discretization is based on the fact
that tariff calculations in Germany are calculated with maximum values in 15 min time
step demand averages [18]. The simulation tools used in this work are implemented in
Python. The linear optimization algorithm in Section 3.4 is implemented using MATLAB®
programming language.

3. Problem Formulation and Applied Methods

3.1. Peak Shaving Operation Strategy: Strategy α
Motivated by a tariff system consisting of an energy demand charge and a peak power
tariff, the aim of state-of-the-art peak shaving is to minimize the maximum power peak
value at one specific node b within a defined billing period. The grid operator expects
the use of this tariff scheme to avoid cable overloading and lower peak loads on the
transformer [19].
In particular, large electricity consumers with an annual demand above a certain limit
(in Germany 100 MWh [18]) can reduce the peak power provided by the power grid, which
directly results in reduced operating expenses in the form of reduced grid charges. In order
to reduce the peak power at a specific node b, the excess demand has to be either covered
by another power providing unit, such as a diesel generator, or in our case, a BESS. The
BESS is used to decouple the supply and demand over a specified time. Consequently, it is
essential to find a peak shaving threshold Sthresh,b above which the power is provided by
the BESS.
In this work, we assume a straightforward charging approach as described in Equa-
tions (4) and (5): the BESS is charged whenever the apparent power Sbt of the given load
profile falls below a previously defined peak shaving threshold Sthresh,b and discharged
when the threshold is exceeded. With this strategy, the BESS is fully charged most of the
time and is only used, if the local load is above the peak shaving threshold Sthresh,b . This
operation mode is therefore independent of the load at the PCC and is therefore the most
reliable strategy for a consumer with the only goal to reduce the local peak load. The
methodology to find the peak shaving threshold Sthresh,b is described in Section 3.4.

Charging : Sbt < Sthresh,b ∀t (4)

Discharging : Sbt > Sthresh,b ∀t (5)

3.2. Grid-Centered Peak Shaving: Strategy β

This subsection introduces an approach to use BESSs of distributed industrial cus-
tomers to reduce power peaks at the grid operator’s PCC. To achieve this, the vector of the
Electricity 2021, 2 579

apparent power SPCC at the PCC is used to determine the operation strategy of BESSs of
industrial customers instead of the local load profile vector.
h i
SPCC = SPCC1 , · · · , SPCC
t , · · · , SPCC
T (6)

The optimization goal of grid-centered peak shaving is to minimize the peak power
at the PCC instead of the power peak at a specific node b (Strategy α). Consecutively, the
peak shaving thresholds of the industrial customers storage systems are recalculated in
order to maximally reduce the peak power with a given BESS capacity by the previously
introduced method, while SPCC serves as input for the peak shaving scheduling. The new
threshold Sthresh,PCC is calculated using an iterative approach [20].

3.3. Combined Peak Shaving Approach: Strategy γ

This subsection introduces an approach to use industrial customers’ BESS to reduce
both PCC and local peaks. First, a scaling factor σb for every node b is calculated that sets
the highest PCC power in relation to the highest power at a specific node b as showed in
Equation (7).
 
max Sbt
σb =   (7)
max SPCC

In Equation (8), every load of the vector SPCC is multiplied by σb to scale the PCC load
profile down to the dimensions of the load profile at a specific node b. The scaled-down
vector is denoted as SScaled,b .

SScaled,b = SPCC · σb (8)

Based on SScaled,b and the local load profile Sbt at node b in Equation (9) a combined
load profile Scomb
t is created. For every point of time t in T, the maximum value of SScaled,b
b
and S is used to obtain the combined load profile Scomb t that takes both the peaks at the
PCC and the local peaks into account.

Scomb,b = max(SScaled,b
t , Sbt ) ∀t (9)
Subsequently, Scomb
t serves as the input for the peak shaving operation strategy. Again,
the peak shaving thresholds of the industrial customers’ storage systems are recalculated
in order to maximally reduce the peak power with given capacities. The new threshold
Sthresh,comb is calculated using an iterative approach [20]. It must be noticed that this
strategy is less reliable for the reduction of the local peak load than strategy α, since the
BESS now also might be used to reduce the peak load at the PCC. However, this will be
discussed in more detail in Section 4.
All three energy management strategies used in this work are depicted in Figure 4.
All solid lines mark the results of the power flow analysis without BESS and the dashed
lines marks the results of the power flow analysis including a BESS at a specific node b.
The black solid line associated to the right y-axis shows the difference in power, covered by
the BESS. In this example, a BESS with an energy content of 100 kWh is used to shave the
peaks. The upper plot (a) shows the results for an exemplary industrial consumer if the
BESS operates in a stand-alone peak shaving mode. While in this study the BESS works
only in a real power operation, the apparent power is shown in the plot.
The solid line at subplot (b) shows the results for the power flow analysis at the PCC if
the BESS at the same node b operates in a grid-centered peak shaving mode. The difference
between with and without storage is very small due to the significantly higher load at
the PCC compared to the load at a specific node b, so the dashed line follows the solid
line almost exactly. The difference is displayed with the black solid line associated to the
right y-axis. The maximum difference is with 100.2 kVA slightly higher than the maximum
Electricity 2021, 2 580

power of the exemplary BESS. This is due to the fact that the BESS is placed at a specific
node b and because of this, less energy has to be transmitted from the PCC to this node.
This allows line losses to be reduced.

200 (a) 150

Local power wo BESS

" power in kVA

150 Local power with BESS 75
Power in kVA
" power
100 0

50 -75

0 -150
4000 (b) 150
3115 PCC power wo BESS

" power in kVA

3000 3095 PCC power with BESS 75
Power in kVA

" power
3075
2000 06:30 0

1000 -75

0 -150
200 (c) 150
Comb. power wo BESS

" power in kVA

Comb. power with BESS
150 75
Power in kVA

" power

100 0

50 -75

0 -150
0 2 4 6 8 10 12 14 16 18 20 22 24
Hour of the exemplary day

Figure 4. Graphical representation of all three energy management strategies used in this study.
Subplot (a) shows an exemplary load profile for an industrial consumer at a specific node b. The
related power at the point of common coupling is displayed in subplot (b) and subplot (c) shows the
combined profile. The solid line marks the results of the power flow analysis without the battery
energy storage system (BESS) at a specific node b and the dashed line marks the results of the
power flow analysis including the BESS. The black solid line associated to the right y-axis shows the
difference in power, covered by the BESS.

The lower plot (c) shows the combined load profile Scomb
t (solid line) for an exemplary
industrial consumer, including the scaled load from the PCC. In the hours six to eight it can
be seen that the scaled load profile from the PCC is responsible for the peak. Consequently
the BESS shaves this peak and therefore ensures a lower peak load at the PCC. As with
strategy α, the BESS also manages to shave the local peak between hours 16 and 22 with the
combined strategy. Again the black solid line shows the difference in power, covered by the
BESS. Compared to the other two strategies, the BESS is stressed twice on this exemplary
day. The effects of this are discussed in the next chapter.

3.4. Battery Energy Storage System: Component Sizing

Sizing of the BESSs is conducted using an adopted version of a previously described
linear programming optimization approach [9]: The cost function (Equation (10)) allows
finding a profit optimal compromise between electricity costs (tariff dominated by annual
peak cost) as well as storage investment costs and a battery charge throughput penalty
cost. Motivating low cycle counts and thus manageable cyclic aging within the project
operation period, the throughput penalty cost (wtp ) are included and multiplied with the
energy throughput (BESStp ) of a BESS.

OBJ = Sthresh,b · ppeak · tproj + Pmax · erate · pinvest

BESS + BEEStp · wtp (10)
Electricity 2021, 2 581

We choose a parameter set as follows: The storage investment costs pinvest BESS are set to
$
350 kWh as motivated by [21]. A project operation/depreciation period of tproj = 10 years
well covered by BESS-assisted peak shaving analysis studies presented by Martins et al. [9]
as well as degradation studies with the LFP:C battery cell is used herein [16,22].
In accordance with publicly available tariff tables provided by various distribution
$ rate has
grids in Germany, a peak demand charge of ppeak = 110 kVA ·a was chosen. The e
been set to 1 h−1 as described in Section 2.2. For the lithium-ion based BESS investigated
herein, we chose a value of unity for the this parameter yielding a well-balanced system
layout and shaving of distinguished power peaks. Battery cycling and energy throughput
$
is penalized using a weighting factor of wtp = 0.001 kWh in order that the BESS is not
dis(-charging) needlessly [23].
The boundary conditions of the BESS are described in the constraints Equations (11)–(15).
The actual energy content for a specific time step t of a BESS, denoted as Etactual,b , must remain
within the physical bounds of a storage system:

0 · Enominal ≤ Etactual,b ≤ 1 · Enominal (11)

charge,b discharge,b
The charging and discharging powers (Pt and Pt ) has to be lower than
the rated power Prated of the power electronics.
charge,b
Pt ≤ Prated ∀b (12)
discharge,b
Pt ≥ − Prated ∀b (13)
charge,b discharge,b
The charging and discharging power (Pt and Pt ) for each step t and each
BESS is also limited by the respective maximum energy rate (erate ) of the storage system.
charge,b
Pt ≤ erate · Enominal ∀b (14)
discharge
Pt ≥ − erate · Enominal ∀b (15)

The actual energy content Etactual,b of a BESS is calculated by adding the net charged
charge,b
energy Et to the energy content of the previous time step and subtracting the dis-
discharge,b
charged energy Et . This energy conservation equation of a BESS is defined in
Equation (16).
charge,b discharge,b
Etactual,b = Etactual,b
−1 + Et − Et (16)
In order to derive the best-suited BESS system sizing, we have applied this formulation
(minimize (OBJ)) to the entire set of 72 scenarios. The linear optimization results in BESSs
capacities of less than 10 kWh for 40 out of the 72 customers. These small storage sizes
are neglected in this study, because the capacity is more in the range of home energy
storage systems and no longer in the range of industrial storage systems [24]. The cost
assumptions for the initial costs pinvest
BESS are therefore no longer valid. Furthermore, the
peak load reduction and thus the cost savings would be minor in these cases and therefore
are not considered further. Figure 5 visualizes relative peak shaving limits Sthresh,b in %
for all 32 BESS with a capacity above 10 kWh. The lower plot (b) shows the capacity for
just these BESS.
Electricity 2021, 2 582

(a)
100

Peak shaving limit in %

90

80

70

60
(b)
100
Storage capacity in kWh

75

50

25

0
0 5 10 15 20 25 30
Battery energy storage system

Figure 5. Results of the component sizing optimization. The upper plot (a) shows the peak shaving
limits Sthresh,b in % of the original peak power for all 32 battery energy storage system (BESS) with a
capacity above 10 kWh. The lower plot (b) shows the capacity for just these BESS.

4. Case Studies and Discussion

This section discusses the impact of various strategies of storage systems on the test
distribution grid for a six months simulation period. For this purpose, the load flows and
potential reductions in peak load at the PCC are evaluated in detail and compared to the
results obtained with a state-of-the-art peak shaving algorithm (Strategy α). The effects of
these strategies as well as the resulting stress on the BESS are also investigated.
Figure 6 shows the relative peak load reduction for each of the 32 simulations with
various operating strategies for the BESS. The reduction of the peak load at the local node
b (= location of the BESS) is plotted on the abscissa and the reduction of the peak load at
the PCC can be seen on the ordinate. The results are each related to the maximum power
of the storage system. Based on an erate of 1 as defined in Section 2.2, the maximum power
in kW is equal to the capacity of each BESS in kWh.

1.4 "P PCC / max(PBESS,i)

1.2

Local (α)
0.8
Centralized (β)
Combined (γ)
0.6
Local All

0.4 CentralizedAll
CombinedAll
0.2

-0.4 -0.2 0.2 0.4 0.6 0.8 1 1.2 1.4

-0.2 "P local / max(PBESS,i)

-0.4

Figure 6. Relative peak load reduction for each simulation with various operating strategies for
the battery energy storage system (BESS). The reduction of the peak load at the local node b (=
location of the BESS) is plotted on the abscissa and the reduction of the peak load at the point of
common coupling (PCC) can be seen on the ordinate. The red crosses show the reduction if the BESS
is operated with strategy α. The blue crosses show the results for strategy β and the green ones for
the combined approach (Strategy γ). The filled circles show the reduction of the peak load at the
PCC if all 32 BESSs are integrated into the grid simultaneously.
Electricity 2021, 2 583

The red crosses show the reduction if the BESS is operated with strategy α. It can be
seen that the storage system reaches a reduction of the peak load at the associated node b
in all 32 simulations. In most of the cases no peak load reduction at the PCC can be reached.
The reason for this behavior is that in these cases the peaks in the load profile have a longer
duration and thus the energy content is the limiting factor. As described in Section 3 and
exemplary shown in Figure 4, the load profiles include reactive power, while the BESS in
this study operates with active power only.
The initial motivation for a peak power tariff was to smooth out power peaks in the
entire distribution grid. However, with this state-of-the-art peak shaving strategy only
one case shows a reduction at the PCC. Even with all 32 storage systems integrated in the
grid at the same time, only very small (13.63 kVA) improvements can be achieved with a
conventional peak shaving algorithm.
The reduction for strategy β is marked with blue crosses. Since only one very high
peak occurs at the PCC during the period under consideration, the change is almost
identical with all 32 storage systems and corresponds to the maximum possible discharge
power. Due to the fact that the BESS is located in different locations in the grid, line losses
can be reduced during discharge. This results in relative reductions above one. However,
for industrial customers themselves, the centralized algorithm never achieves a reduction
in the peak load in this simulation setting.
The green crosses show the reduction if the BESS is operated in accordance to the
newly developed combined approach (Strategy γ). In this case, both the local peak load
and the global peak load will be reduced. It can be seen that the reduction at the location of
the storage is nearly as high as with the state-of-the-art peak shaving strategy. However, a
significant peak load reduction in the PCC is now also achieved. The filled circles in the
figure show the reduction of the peak load at the PCC if all 32 BESSs are integrated into
the grid simultaneously. Again, due to the fact that only one very high peak occurs at the
PCC, the reduction with the centralized approach is almost the summed-up maximum
possible discharge power of all BESSs. In contrast, with the combined approach with a
reduction of 706.70 kVA, almost the same reduction is achieved as with the centralized
approach (868.02 kVA).
Figure 7 supports the statements from the relative reduction plot by showing the
absolute reduction for each simulation. The upper plot (a) shows the absolute peak load
reduction for each simulation if the BESS is operated with strategy α. It can be seen that
the peak reduction at the respective node b is minimum 5.05 kVA and maximum 53.3 kVA,
which results with the numbers of Section 3.4 in an annual revenue of approximately $ 555.5
to $ 5,858.6. However, with this state-of-the-art peak shaving strategy only simulation 13
achieves a reduction at the PCC with 13.6 kVA. All others fail to reduce the peak load at
the PCC. With the centralized approach (Strategy β), depicted in plot (b) the peak load at
the PCC is reduced by 10.4 kVA to 83.1 kVA. The industrial consumers peak load is not
reduced in any case, but is increased by up to 16.6 kVA in six cases.
The lower plot (c) shows the absolute peak load reduction for each simulation if the
BESS is operated with strategy γ. The red bars show the difference in peak load at a local
node b (=storage location), the blue bars show the peak load reduction at the PCC. The
industrial consumers peak load reduction differs only in two cases above 1.0 kVA. The
maximum occurs in simulation six with 2.8 kVA, which would result in a decreased annual
revenue of $ 308.0. However, with this combined approach the peak load at the PCC is
also reduced by 5.6 kVA to 56.7 kVA. Compared to the maximums before (53.3 kVA and
83.1 kVA), which both occurs at simulation six, the combined approach achieves a summed
up reduction of 107.2 kVA. Integrating all 32 BESSs to the grid simultaneously, a reduction
at the PCC of 706.7 kVA can be achieved.
Electricity 2021, 2 584

(a)
120

" Peak load in kVA

100 Local
80 PCC

60
40
20
0
-20
(b)
120
" Peak load in kVA

100 Local
80 PCC

60
40
20
0
-20

(c)
120
Local
" Peak load in kVA

100
PCC
80
60
40
20
0
-20
5 10 15 20 25 30
Battery energy storage system

Figure 7. The upper plot (a) shows the absolute peak load reduction for each simulation if the
battery energy storage system (BESS) is operated with strategy α. Plot (b) shows the results for the
centralized approach (Strategy β). The lower plot (c) shows the absolute peak load reduction for
each simulation if the BESS is operated with the newly developed combined approach (Strategy γ).
The red bars show the difference in peak load at a local node b, the blue bars show the peak load
reduction at the point of common coupling (PCC).

To evaluate the reduction in detail, the additional stress on the energy storage must
also be considered. Figure 8 shows the results for all simulations using various key
characteristics, which have been defined in a previous publication [14]. Subplot (a) shows
the number of full equivalent cycles and the mean round-trip efficiency is displayed in
subplot (b). The remaining characteristics describe the stress on the BESSs in greater detail.
Subplot (c) shows the average cycle depth in discharge direction and the average resting
time between two actions is illustrated in subplot (d). The number of alternations between
charging and discharging (sign changes) per day is indicated in subplot (e), while subplot
(f) shows the energy in relation to the BESS capacity that is charged or discharged between
sign changes, respectively.
The highest peak at the PCC is 40.9 MVA and thus 1.4 MVA higher than the second
highest peak. Consequently, all BESSs at the centralized approach (Strategy β) are only able
to reduce this one maximum 15-minute peak and therefore only one sign change occurs.
This also results in high resting times for the six month simulation period. Due to the losses
in the storage system the total number of full equivalent cycles is 0.28 and consequently
the cycle depth in discharge direction is 28% with a storage systems erate of one.
Comparing the results for strategy α and strategy γ, it can be seen that the BESSs
have on average 1.2 full equivalent cycles more than the storage systems operating with a
conventional peak shaving strategy. In the case of the LIB used, this results in a deviation
in the remaining capacity of 0.01% (95.31 to 95.32) for the six month simulation period due
to the high cycle stability. Resulting from very low additional stress on the storage system,
there are hardly any differences for almost all other key characteristics. Only the duration
Electricity 2021, 2 585

of the resting times between two actions falls significantly from 237.8 h to 131.3 h. However,
this average resting time is still quite long and the storage systems remain underutilized
with both strategies and it should be considered to use these to achieve additional revenues
by using a multi-use approach [25]—a topic beyond the scope of this study.

(a) (b)
20 90
Full equivalent cycles

System efficieny in %
15

10 85

0 80
Local (α) Centralized (β)Combined (γ) Local (α) Centralized (β)Combined (γ)

(c) #10 4 (d)

25
10
DOCdis in %

trest in min
20

15 5

10
0
Local (α) Centralized (β)Combined (γ) Local (α) Centralized (β)Combined (γ)

(e) (f)
30
E swapsign(pos.) in %

2
nswapsign per day

25
1.5
20
1
15
0.5
10
0
Local (α) Centralized (β)Combined (γ) Local (α) Centralized (β)Combined (γ)

Figure 8. Detailed results about the additional stress on the battery energy storage systems (BESSs)
for a six month simulation period. Subplot (a) shows the number of full equivalent cycles and the
mean round-trip efficiency in % is displayed in subplot (b). Subplot (c) shows the average cycle depth
in discharge direction in % and the average resting time in minutes between two actions is illustrated
in subplot (d). The number of alternations between charging and discharging (sign changes) per day
is indicated in subplot (e). Finally, subplot (f) shows the energy in relation to the BESS capacity that
is charged between these sign changes.

5. Conclusions and Outlook

This paper presented a method to reduce the peak power at a specific node as well as
at the transformer or PCC in distribution grids or microgrids by using BESSs. The storage
systems are located at 32 various industrial consumers with individual load profiles in a
MV-grid with 146 underlying LV-grids. A method of a combined operation strategy for
BESSs located at industrial consumers has been developed to achieve both an improvement
in the distribution grid as well as electricity bill savings for industrial consumers. By using
and adapting the open_BEA framework, accurate co-simulations of BESSs and distribution
grids are performed. The stress on the LIB-based stationary BESSs at the various strategies
is evaluated by adapting the holistic energy storage simulation framework SimSES.
The newly developed combined approach (Strategy γ) uses a scaling factor for the
power profile at the PCC in order to combine this load profile with the load profile of an
individual industrial consumer. This combined profile serves as the input for the peak
shaving operation strategy and the results are compared to a state-of-the-art peak shaving
strategy (industrial consumer only; Strategy α) and a centralized approach (PCC only; Strat-
egy β). The BESSs are economical optimally sized using a linear optimization approach.
Electricity 2021, 2 586

Results show that with strategy γ both the local peak load and the global peak load
can be reduced. The reduction at the location of the storage is nearly as high as with
strategy α. With strategy γ the peak load at the PCC is reduced by 5.6 kVA to 56.7 kVA and
the total reduction is always higher than with strategy α or strategy β. Although in this
scenario the BESSs reduce both peaks, the additional stress for the six month simulation
period is on average only 1.2 full equivalent cycles higher. This additional stress results in
slightly higher aging (0.01%) with the used LIB.
Accelerated aging as well as adaptions in the energy management systems would
have to be compensated financially by the grid operator to the storage owner or indus-
trial consumer. However, it must be taken into account that the grid operator benefits
economically by being able to avoid a possible grid reinforcement or transformer upgrade.
The framework shown in this study requires communication (e.g., via the 5G communi-
cation standard [26,27] or the IEC 60870 standard [28]) between the grid operator and its
current load at the PCC and the industrial consumer including the storage system. In
addition, the algorithms introduced in this study require the creation of an economic and
legal framework.

Future Work and Outlook

This study focuses on the technical potential of combined operation strategies for
storage systems located at various industrial consumers in a distribution grid. The addi-
tional reduction in the peak load at the PCC may avoid the need of grid reinforcement or
transformer exchange. Future work should focus on an economic analysis to compare the
cost of installing a BESS with the costs of conventional grid reinforcement. From a grid
perspective, future studies could also focus more on other grid-related applications as an
additional service of the BESS, such as reactive power control.
Furthermore a highly discussed topic is the ecological assessment of storage systems.
In addition to the economic assessment, it might also be worthwhile to perform an ecologi-
cal analysis. This would allow a more precise comparison of the CO2 impact of BESSs and
the CO2 impact caused by conventional grid reinforcement.

Author Contributions: D.K.: Conceptualization, Methodology, Software, Investigation, Writing—

Original Draft L.S.: Methodology, Software, Formal analysis, Writing—Original Draft, Visualization
N.C.: Methodology, Software, Writing—Review and Editing A.J.: Writing—Review and Editing,
Supervision, Funding acquisition H.H.: Methodology, Writing—Review abd Editing, Supervision,
Funding acquisition. All authors have read and agreed to the published version of the manuscript.
Funding: This publication was financially supported by the German Federal Ministry for Economic
Affairs and Energy within the research project open_BEA (Grant No. 03ET4072), which is managed
by Project Management Jülich. The responsibility for this study rests with the authors.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: Not applicable.
Conflicts of Interest: The authors declare no conflict of interest.
Electricity 2021, 2 587

Parameters & variables

Etactual,b actual energy content of a battery energy storage
system at a specific node b for a specific time
step t
charge,b
Et charged energy of a battery energy storage sys-
tem at a specific node b for a specific time step
t
discharge,b
Et discharged energy of a battery energy storage
system at a specific node b for a specific time
step t
charge,b
Pt charging power of a battery energy storage sys-
tem at a specific node b for a specific time step
t
discharge,b
Pt discharging power of a battery energy storage
system at a specific node b for a specific time
step t
Prated rated power of the power electronics
BESStp energy throughput of a battery energy storage
system
Sbt apparent power at a specific node b for a specific
time step t
Scomb
t combined apparent power including the power
at a specific node b and the apparent power at
the point of common coupling
Sthresh,PCC peak shaving threshold power for a battery en-
ergy storage system operating with the grid-
centered approach
Sthresh,b peak shaving threshold power for a specific
node b
Sthresh,comb peak shaving threshold power for a battery en-
ergy storage system operating with the com-
bined approach
σb scaling factor: peak power at the point of com-
mon coupling in relation to the peak load at a
specific node b
SPCC vector of the apparent power at the point of
common coupling for each time step t
SScaled,b scaled apparent power of the point of common
coupling in relation to the peak load at a specific
node b
S matrix for the apparent power at each node b
for each time step t
erate energy rate of the battery energy storage system
pinvest
BESS storage investment costs per kWh
ppeak annual peak demand charge per kVA
tproj project operation/depreciation period in years
wtp throughput penalty costs
η PE efficiency of the power electronics

Abbreviations
AC alternating current
Electricity 2021, 2 588

BESS battery energy storage system

BMS battery management system
C carbon/graphite
DC direct current
eDisGo software for electric distribution grid optimiza-
tion
LFP lithium-iron-phosphate
LIB lithium-ion battery
LV low voltage
MV medium voltage
open_BEA open battery models for electrical grid applica-
tions
PCC point of common coupling
SimSES simulation of stationary energy storage systems
SOE state of energy

Sets & indices

B total number of nodes b in the distribution grid
H time vector for the simulation period (time hori-
zon)
T time horizon
N vector for all industrial consumers in the distri-
bution grid
b nodes with industrial consumers in the distribu-
tion grid
t specific time step

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