Ensuring Profitability of Energy Storage

Yury Dvorkin, R. Fernandez-Blanco, Daniel S. Kirschen, Hrvoje Pandzic, J.P Watson, C.A. Silva Monroy

Research output: Contribution to journalArticlepeer-review


Energy storage (ES) is a pivotal technology for dealing with the challenges caused by the integration of renewable energy sources. It is expected that a decrease in the capital cost of storage will eventually spur the deployment of large amounts of ES. These devices will provide transmission services, such as spatiotemporal energy arbitrage, i.e., storing surplus energy from intermittent renewable sources for later use by loads while reducing the congestion in the transmission network. This paper proposes a bilevel program that determines the optimal location and size of storage devices to perform this spatiotemporal energy arbitrage. This method aims to simultaneously reduce the system-wide operating cost and the cost of investments in ES while ensuring that merchant storage devices collect sufficient profits to fully recover their investment cost. The usefulness of the proposed method is illustrated using a representative case study of the ISO New England system with a prospective wind generation portfolio.

Original languageEnglish (US)
Article number(Early Access)
Pages (from-to)611-623
JournalIEEE Transactions on Power Systems
Issue number1
StatePublished - Jan 2017


Dive into the research topics of 'Ensuring Profitability of Energy Storage'. Together they form a unique fingerprint.

Cite this