Open Access Open Access  Restricted Access Subscription or Fee Access

Economic Capacity Planning of BESS for Electricity Customers Charged Based on Both Energy and Peak Demand

Yong Hwa Lee(1), Young Gyu Jin(2*), Yong Tae Yoon(3)

(1) Smart Metering Team, Korea Electric Power Corporation, Naju, Korea, Republic of
(2) Department of Electrical Engineering, Jeju National University, Jeju, Korea, Republic of
(3) Department of Electrical and Computer Engineering, Seoul National University, Seoul, Korea, Republic of
(*) Corresponding author



Electricity customers can achieve economic benefits from cost reduction and/or revenue increase using battery energy storage system (BESS). However, different conditions of each customer require different methods to determine the suitable size of BESS. Additionally, different operation strategies of BESS result in the different cost/benefit analysis. Thus, in this study, authors have identified and focused on the electricity customers with TOU rate, varying operation mode with the seasons, and charging scheme based on both energy consumption and the peak demand. The procedures to find the optimal power and energy capacities for the selected customer are formulated. The optimal operation strategy with priority, that is, peak shaving–DR–scheduling modes in summer/winter and DR–scheduling mode–peak shaving modes in spring/autumn, is also proposed. The proposed method is applied to a specific type of customer in Korea in the case study. The results showed that an optimal capacity can be found and the proposed operation strategy with priority is optimal. Moreover, it has been found out that, for this type of customer, the large energy capacity of BESS mostly leads to large economic benefit; in contrast, the small power capacity mostly leads to small economic benefit.
Copyright © 2018 Praise Worthy Prize - All rights reserved.


Economic Analysis; Capacity Planning; BESS; Demand Charge; TOU Rate

Full Text:



Global Wind Energy Council, Global Wind Report-Annual Market Update 2017 (GWEC, 2018) Available at:

International Energy Agency, A Snapshot of Global PV (1992-2017) (IEA, 2017)
Available at:

M. Y. Suberu, M. W. Mustafa, N. Bashir, Energy storage systems for renewable energy power sector integration and mitigation of intermittency, Renewable and Sustainable Energy Reviews, vol. 35, 2014, pp. 499–514.

A. Castillo, D. F. Gayme, Grid-scale energy storage applications in renewable energy integration: A survey, Energy Conversion and Management, vol. 87, 2014, pp. 885–894.

M. Datta, T. Senjyu, Fuzzy Control of Distributed PV Inverters/Energy Storage Systems/Electric Vehicles for Frequency Regulation in a Large Power System, IEEE Transactions on Smart Grid., vol. 4, n. 1, 2013, pp. 479–488.

J. Leadbetter, L. Swan, Battery storage system for residential electricity peak demand shaving, Energy and Buildings, vol. 55, 2012, pp. 685–692.

E. Lobato, L. Sigrist, L. Rouco, Use of energy storage systems for peak shaving in the Spanish Canary Islands, 2013 IEEE Power & Energy Society General Meeting, Jul. 21-25, 2013, Vancouver, Canada.

A. Strassheim, J. E. S. de Haan, M. Gibescu, W. L. Provision of frequency restoration reserves by possible energy storage systems in Germany and the Netherlands, 11th International Conference on the European Energy Market, May 28-30, 2014, Krakow, Poland.

A. Kyriakopoulos, D. O'Sullivan, J.G. Hayes, J. Griffiths, M.G. Egan, Kinetic Energy Storage for High Reliability Power Supply Back-up, Twenty-Second Annual IEEE Applied Power Electronics Conference and Exposition, Feb. 25-Mar. 1, 2008, CA, USA.

X. Luo, J. Wang, M. Dooner, J. Overview of current development in electrical energy storage technologies and the application potential in power system operation, Applied Energy, vol. 137, 2015, pp. 511–536.

H. Zhao, Q. Wu, S. Hu, H. Xu, C.N. Rasmussen Review of energy storage system for wind power integration support, Applied Energy, vol. 137, 2015, pp. 545–553.

M. T. Lawder et al., Battery Energy Storage System (BESS) and Battery Management System (BMS) for Grid-Scale Applications, Proceedings of the IEEE, vol. 102, no. 6, 2014, pp. 1014–1030.

J. A. P. Lopes, F. J. Soares, P. M. R. Almeida, Integration of Electric Vehicles in the Electric Power System, Proceedings of the IEEE, vol. 99, no. 1, 2011, pp. 168–183.

F. Mwasilu, J. J. Justo, E.-K. Kim, T. D. Do, J.-W. Jung, Electric vehicles and smart grid interaction: A review on vehicle to grid and renewable energy sources integration, Renewable and Sustainable Energy Reviews, vol. 34, 2014, pp. 501–516.

Y. Yang, S. Bremner, C. Menictas, M. Kay, Battery energy storage system size determination in renewable energy systems: A review, Renewable and Sustainable Energy Reviews, vol. 91, 2018, pp. 109–125.

Ministry of Trade, Industry and Energy of Korea, Regulation on the Promotion of Rational Use of Energy by Public Agencies, (MOTIE, 2017).

T.-Y. Lee, N. Chen, Determination of optimal contract capacities and optimal sizes of battery energy storage systems for time-of-use rates industrial customers, IEEE Transactions on Energy Conversion, vol. 10, n. 3, 1995, pp. 562–568.

C. Lu, H. Xu, X. Pan, J. Song, Optimal Sizing and Control of Battery Energy Storage System for Peak Load Shaving, Energies, vol. 7, n. 12, 2014, pp. 8396– 8410.

X. Yan, H. Chen, X. Zhang, C. Tan, Energy storage sizing for office buildings based on short-term load forecasting, IEEE 6th International Conference on Information and Automation for Sustainability, Sep. 27-29, 2012, Beijing, China.

K.-H. Cho, S.-K. Kim, E.-S. Kim, Optimal Capacity Determination Method of Battery Energy Storage System for Demand Management of Electricity Customer, The Transactions of The Korean Institute of Electrical Engineers, vol. 62, n. 1, 2013, pp. 21–28.

R. Khalilpour, A. Vassallo, Planning and operation scheduling of PV-battery systems: A novel methodology, Renewable and Sustainable Energy Reviews, vol. 53, 2016, pp. 194–208.

Korea Electric Power Company, Electric Rates Table (KEPCO, 2013) Available at:

S. I. Lee, Economic analysis of energy storage system and policy proposal, Energy Focus, vol. 12, n. 4, 2015, pp. 74–94.

Kerdphol, T., Qudaih, Y., Hongesombut, K., Watanabe, M., Mitani, Y., Intelligent Determination of a Battery Energy Storage System Size and Location Based on RBF Neural Networks for Microgrids, (2016) International Review of Electrical Engineering (IREE), 11 (1), pp. 78-87.

Kerdphol, T., Qudaih, Y., Mitani, Y., Optimal Battery Energy Storage Size Using Particle Swarm Optimization for Microgrid System, (2015) International Review of Electrical Engineering (IREE), 10 (2), pp. 277-285.

Wannasut, C., Hongesombut, K., Deferral of Power Distribution Reinforcement by Using Battery Energy Storage System, (2017) International Review of Electrical Engineering (IREE), 12 (4), pp. 369-377.


  • There are currently no refbacks.

Please send any question about this web site to
Copyright © 2005-2022 Praise Worthy Prize