Cloud Storage for Multi-Service Battery Operation (Extended Version)

Abstract

We study a cloud storage operator who provides shared storage service for electricity end-users using the residual part of a multi-service grid-scale battery primarily used for high priority grid services. We design an optimal product offering, pricing and customer portfolio. A framework and solution approach for assessing and operating such multi-service battery operations with stochastic services and different priority levels is an open problem is proposed. The methodology consists in modelling the problem as a two-stage stochastic optimization between high priority stochastic grid services and low priority cloud storage for stochastic end users. We also propose the operational metrics of multiplexing gain and probability of blocking to assess the operation of multi-service multi-user battery. To address the computational challenge of solving the stochastic optimization with a large number of end-users, we propose effective capacity as a convex approximation that allows an analytical solution. We then provide an empirical analysis based on real grid congestion data from RTE France, and a large dataset of end-users' electricity consumption in California. Our empirical analysis shows (i) our proposed effective capacity is a close approximation, (ii) battery operation and profit are sensitive to the cost of external resources, number of end-users, and RTE's leasing price of the battery, and (iii) with only a slight discount of the leasing price, the profit of the third party from a stochastic residual battery can be the same as that of a deterministic one. Cloud storage as a low priority service can profitably exist alongside other high priority battery services, making integration of more storage in the grid economically viable, and allowing larger intermittent renewables, a key path towards reduced carbon emissions.