Optimal allocation of battery energy storage systems for peak shaving and reliability enhancement in distribution systems

Increasing demand for electricity and frequent power outages are common factors that are necessitating power utility companies to refurbish the existing power distribution systems. To avoid such expensive upgrades, a practical and more viable alternative solution is to use a battery energy storage system (BESS) that can participate in peak shaving requirements and function as an additional power source during power outages. In this context, this work develops an optimization model to optimally determine the size and site of a BESS connected to the distribution network for the purpose of two critical service options, namely peak shaving and reliability improvement, under both system normal and outage scenarios. Nonlinearities due to the sizing and siting variables of the BESS are linearized using the big-M method, and the resulting model becomes a mixed-integer linear programming (MILP) problem. The decisions made during planning, namely the size and location of the BESS, directly impact operational decisions regarding how the BESS supports peak shaving and outage management, if applicable. By considering a utility's historical load and outage data, the efficacy of the proposed model is validated on a realistic distribution circuit that is located at the edge of a service territory with no circuit ties. The optimal BESS allocation obtained from the model achieves up to 93.5% enhancement in the system's reliability and also decreases the feeder's peak demand by about 17% for a one-year planning horizon. The case studies demonstrate that the model is computationally scalable and efficient, and electric distribution planners may benefit from this study and use this as a framework for possible BESS integration to defer expensive peak capacity-related upgrades while adding an extra source for backup power supply.