The impact of electricity pricing schemes on storage adoption in Ontario

  • Authors:
  • Tommy Carpenter;Sahil Singla;Parsiad Azimzadeh;S. Keshav

  • Affiliations:
  • University of Waterloo, Waterloo, Ontario;University of Waterloo, Waterloo, Ontario;University of Waterloo, Waterloo, Ontario;University of Waterloo, Waterloo, Ontario

  • Venue:
  • Proceedings of the 3rd International Conference on Future Energy Systems: Where Energy, Computing and Communication Meet
  • Year:
  • 2012

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Abstract

The Ontario electrical grid is sized to meet peak electricity load. If this worst-case load were reduced, the government and Ontario tax-payers could defer large infrastructural costs, reducing the cost of generation and electricity prices. Storage, batteries that can store energy during times of low load and be discharged during times of peak load, is one proposed solution to reducing peak load. We evaluate the effect of storage on the electrical grid under different customer electricity pricing schemes. We find that for existing pricing schemes, adopting storage is not profitable. Furthermore, as the level of storage adoption in the population increases, pricing schemes that incentivize charging at times known to all homeowners will eventually increase the peak load rather than decrease it. However, in some circumstances particular levels of homeowner storage adoption helps the grid reduce peak load, and thus the grid may choose to subsidize the cost of storage. We discuss hypothetical pricing schemes under which storage adoption is profitable for homeowners.