A Robust Alternative to Critical Peak Pricing for Electricity Using Distributed Energy Storage.

This article focuses on evaluating strategies for managing distributed energy storage to reduce peak electricity loads efficiently under conditions of uncertain wind generation and elastic supply. It demonstrates that while Critical Peak Pricing (CPP) can incentivize load shifting, its effectiveness is undermined by wind generation variability and price uncertainty, leading to inadequate peak reductions for system adequacy as defined by the North American Electric Reliability Corporation (NERC) standard of one-day-in-ten-years failure. The authors propose a robust heuristic strategy that discharges storage based on realized net-load relative to a target, maximizing the attainable peak reduction and better meeting adequacy requirements, though at the cost of lower and more variable wholesale market savings compared to CPP. The study highlights the trade-offs between financial incentives for storage owners and system reliability, suggesting that regulators should consider improved renewable forecasts and operational strategies to reduce ramping needs and enhance long-run efficiency.