Optimization of battery energy storage system (BESS) sizing in different electricity market types considering BESS utilization mechanisms and ownerships

To elucidate the optimal techno-economic role of battery energy storage system (BESS), this study proposes optimal sizing of BESS in various scenarios based on BESS installation in existing photovoltaic systems. The proposed scenarios include different electricity market types (i.e., peer-to-grid, peer-to-peer, and energy storage sharing) considering utilization mechanism (i.e., individual-design or shared-design) and ownership (i.e., user- owned or developer-owned) of the BESS. Towards this end, this study develops comprehensive and systematic mathematical models for BESS sizing using mixed-integer linear programming algorithm, and the BESS sizing is optimized to maximize the total net present value. The developed models are validated in the Hong Kong context considering four peers, and the empirical data of electric load profile as well as the photovoltaic installed capacity are collected. As a result, it is indicated that the optimal BESS capacity in energy storage sharing scenario is the least. In terms of electricity bill saving, user-owned BESS is regarded as the model yielding the highest electricity bill savings. The breakdown of net present value exposes that under the same ownership, the optimal BESS capacity is determined by different utilization mechanisms. Regarding the total net present value, it is found that developer-owned BESS could achieve the maximum economic merits. Nonetheless, the distribution loss through energy storage sharing is also the highest. The policy implications of this study primarily emphasize incentivizing user-owned BESS, promoting energy storage sharing, supporting shared BESS infrastructure, and encouraging a diversity of electricity trading mechanisms to enhance the integration and efficiency of renewable energy systems.