A Second-Order Marginal Costs Approximation for Energy Storage Charging and Discharging Price Functions

Abstract

A second-order technique is presented for the evaluation of peak/off-peak price functions, based on marginal costs methods, in energy storage technologies. This method is particularly useful in statical optimization of the fundamental parameters required for planning energy storage plants. Its applications permits to transform the original dynamic optimization problem into its statical equivalent, thus reducing considerably the computing time needed. This transformation introduces two additional parameters to be optimized using statical optimization methods, i.e., charging and discharging duration.