Economic assessment of storage in microgrids

Date: 26 September 2018

Venue: University of Antwerp, Promotiezaal Grauwzusters - Lange Sint-Annastraat 7 - 2000 Antwerp (route: UAntwerpen, Stadscampus)

Time: 4:00 PM

PhD candidate: Kevin Millis

Principal investigator: Prof. dr. Herbert Peremans, Prof. dr. Steven Van Passel

Short description: PhD defence Kevin Millis - Faculty of Business and Economics


Generation of electricity using conventional means has come under increased scrutiny. One promising avenue of technological advancement where electrical power generation is concerned, is the advent of renewable energy generation sources. These generation sources promise near boundless energy, at low marginal cost and with low environmental impact, albeit at a rather high upfront investment cost.

However, one property these aforementioned renewable energy sources have in common, is their intermittent nature. The most effective and efficient way to integrate these intermittent energy sources into the electrical grid would be to ensure that load follows generation. It is clear that in that case bi-directional information flows between generation and consumption will be needed. The today oft-mentioned “smart grids” are such power networks with bi-directional information and power flows, allowing for integration of renewable energy sources, energy storage and electrical vehicles.

Smart grids and by extension microgrids, which are subsections of the grid that are able to operate in a self-contained manner, offer many benefits to society as a whole, mainly by offering support for increasing penetration of renewable energy sources. However, electrical storage, does not really seem to gain traction amongst residential consumers, especially when compared to solar PV. It is this observation of low penetration of electrical storage in residential microgrids that drives the central research question addressed within this dissertation: What is the economic value of storage for a residential microgrid owner currently, and in case it proves to be negative, what are policy levers that can be used to address this? The findings of the research are that storage is currently not installed as part of a cost minimizing microgrid, but also that certain policy interventions, like carbon taxation or feed-in tariffs are extensively studied in the literature, while other policy interventions, such as capacity tariff schemes receive little to no attention. Based on these findings, a capacity tariff scheme is proposed and is shown through cost minimisation of simulated microgrids to be effective at encouraging the uptake of storage in residential microgrids.