Optimal sizing of BESS in smart microgrid considering virtual energy storage system and high photovoltaic penetration

Abstract In the smart microgrid system, the optimal sizing of battery energy storage system (BESS) considering virtual energy storage system (VESS) can minimize system cost and keep system stable operation. This paper proposes a two-layer BESS optimal sizing strategy considering dispatch of VESS in a smart microgrid with high photovoltaic (PV) penetration. In the first layer, VESS modelling and aggregation are established, and the initial size of BESS is determined by considering VESS participation in demand response program. In the second layer, the optimal sizing of BESS is studied and the optimal energy resources dispatching strategy is formulated via considering various constraints in the system. The mean-variance Markowitz theory is applied to assess the risk of system cost variability due to the presence of PV and load uncertainties. With the ratio of load varies from 70% to 130%, and PV generation ratio from 40% to 100%, sensitivity analysis reveals the optimal size of BESS is less impacted by PV generation change. Also with VaR(95%) the risk of system cost variability can be further reduced through VESS participation.