A Comprehensive Optimization Method for Commercial Building Loads with Renewable Generation and Energy Storage from Utility Rate Structure Perspective

Abstract: To accommodate the changes in the nature and pattern of electricity consumption with the available resources, utility companies have introduced a variety of rate structures over the years. This paper develops a comprehensive optimization method that addresses the diversity of utility rate structure of a commercial building. It includes a general set of constraints that can be used for any system with a building load, a renewable source, and a battery energy storage system (BESS). A cost function is formulated for each type of rate structure that can be exercised by a utility on a commercial building. A novel algorithm is developed to apply the optimization model and generate the desired optimal outputs by using the appropriate cost function. The results for several building loads and rate structure types were obtained and compared. A sensitivity analysis was done on the optimization model based on the changes in the rates using historical data. The results exhibit that adding BESS is more effective for buildings with lower load factor and CPP rate structures in comparison to the buildings with flat energy rates. Savings from adding renewables such as solar is primarily influenced by energy charges whereas additional benefits from BESS are dominated by demand charges. These results can help a customer with deciding on the different rate structure options and resource planning of their renewable generation and energy storage. Utilities may also benefit from this work by designing a unified rate structure, considering the increasing renewable penetration and BESS deployment in the grid.