Morgongåva is an urban centre in Sweden, with several challenges in the electrical power grid. In order to use the power grid more efficiently, this report investigates potentials of installing a battery energy storage system (BESS). Focus lies on finding economic and technical benefits of reducing power peaks, which occur during high demand hours when transmitting energy is more expensive. This method is referred to as peak shaving. Further, economic calculations if installing a BESS are based on electricity pricing data. Calculations regarding technical benefits are based on net power demand data. Further, the study shows that the usage of the grid, which was measured with the load factor, would increase and thus allow installation of more power sources and connecting more load to the grid. The load factor was estimated to increase by an average of 2.12 percent each month in 2019. In one year, the economic profit was estimated to be 91,000 kr. The conclusion is that there are economic profits for Sala-Heby Energi of installing a BESS, but more importantly a BESS has technical consequences in the power grid. Where technical benefits are important in order to reach the goals of Agenda 2030 but also to obtain a more reliable grid for the customers. A sensitivity analysis shows that the model is robust. Thus, the conclusion is that Sala-Heby Energi and the local electricity grid in Morgongåva would benefit from installing a BESS.

abstract: In this work, the stacked values of battery energy storage systems (BESSs) of various power and energy capacities are evaluated as they provide multiple services such as peak shaving, frequency regulation, and reserve support in an ‘Arizona-based test system’ - a simplified, representative model of Salt River Project’s (SRP) system developed using the resource stack information shared by SRP. This has been achieved by developing a mixed-integer linear programming (MILP) based optimization model that captures the operation of BESS in the Arizona-based test system. The model formulation does not include any BESS cost as the objective is to estimate the net savings in total system operation cost after a BESS is deployed in the system. The optimization model has been formulated in such a way that the savings due to the provision of a single service, either peak shaving or frequency regulation or spinning reserve support, by the BESS, can be determined independently. The model also allows calculation of combined savings due to all the services rendered by the BESS. The results of this research suggest that the savings obtained with a BESS providing multiple services are significantly higher than the same capacity BESS delivering a single service in isolation. It is also observed that the marginal contribution of BESS reduces with increasing BESS energy capacity, a result consistent with the law of diminishing returns. Further, small changes in the simulation environment, such as factoring in generator forced outage rates or projection of future solar penetration, can lead to changes as high as 10% in the calculated stacked value. / Dissertation/Thesis / Masters Thesis Electrical Engineering 2020

The purpose of this study is to analyse how a battery energy storage system (BESS) can support the frequency and voltage stability for an islanded microgrid containing a hydropower plant. Two different microgrids, both situated in Sweden, are evaluated. Modelling and dynamic simulations are conducted in the PowerFactory tool. The result shows that both the frequency and the voltage control can be improved with the BESS. However, with the allowed limit of ± 1 Hz, not all simulated scenarios including a BESS meets the requirement. A large difference between the BESS and generator capacity might be a possible cause for this. By dividing the larger loads so that smaller loads are attained, the frequency deviation might be reduced. Furthermore, by adjusting the systems PID-parameters according to the island mode operation, faster regulation can be attained. The system operates according to the Master slave control strategy, with the hydropower being the master unit with voltage control and the BESS being a slave unit with PQ control. The ability to operate an islanded microgrid can ensure the supply of electricity to inhabitants and vital functions in society. By utilizing a BESS for increasing electric stability, emission of CO2 is indirectly mitigated. As cost for BESS are expected to decrease rapidly, they will be accessible for utilization all over the world.

In deregulated electricity markets, profit driven electricity retailers compete to supply cheap reliable electricity to electricity consumers, and the electricity consumers have free will to switch between the electricity retailers. The need to maximize the profits of the electricity retailers while minimizing the electricity costs of the electricity consumers has therefore seen a drastic increase in the research of electricity markets. One of the factors that affect the profits of the electricity retailers and the energy cost of the consumers in electricity retail markets is the supply and demand. During high-supply and low-demand periods, the excess electricity if not managed, is wasted. During low-supply high-demand periods, the deficit supply can lead to electricity blackouts or costly electricity because of the volatile electricity wholesale spot market prices. Research studies have shown that electricity retailers can achieve significant profits and reduced electricity costs for their electricity consumers by minimizing the excess electricity and deficit electricity. Existing studies developed load forecasting models that aimed to match electricity supply and electricity demand. These models reached excellent accuracy levels, however due to the high volatility character of load demand and the rise of new electricity consumers, load forecasting alone is unable to mitigate excess and deficit electricity. In other studies, researchers proposed charging the electricity consumers’ batteries with excess electricity during high-supply low-demand periods and supplying their deficit electricity during low-supply high-demand periods. Electricity consumers’ incorporating batteries resulted in minimized excess and deficit electricity, in turn, maximizing the profits for the electricity retailers and minimizing the electricity costs for the electricity consumers. However, the batteries are consumer centric and only provide battery energy for the battery-owned consumer. Electricity consumers without battery energy during low-supply highdemand periods have electricity blackouts or require costly electricity from the electricity wholesale spot market. The peer-to-peer (P2P) energy sharing framework which allows electricity consumers to share their energy resources with one another is a viable solution to allow electricity consumers to share their battery energy. P2P energy sharing is a hot topic in research because of its potential to maximize the electricity retailers’ profits and minimize the electricity consumers’ electricity costs. Due to the increased profits for the electricity retailer and reduced electricity costs for the electricity consumers from implementing battery charging and P2P energy sharing, this dissertation proposes a day-ahead electricity retail market structure in which the electricity retailer supplies consumers’ batteries with excess electricity during high-supply low-demand periods, and during low-supply highdemand periods the electricity retailer discharges the consumers’ batteries to supply their deficit supply or supply their peers’ deficit supply. The electricity retailer aims to maximize its profits and minimize the electricity cost of the electricity consumers in its electricity retail market, by minimizing the excess and deficit electricity. The problem is formulated as a non-linear optimization model and solved using game theory. This dissertation compares the profits of the electricity retailer and electricity costs of the consumers that charge their batteries with excess electricity, discharge their batteries and purchase electricity from their peers to supply their deficit supply, with consumers that only charge their batteries with excess electricity but do not share their battery energy with their peers, consumers that only purchase electricity from their peers to supply their deficit supply but do not employ a battery, and consumers that neither employ a battery nor purchase electricity from their peers to supply their deficit supply. The results show that the consumers that charge their batteries with excess electricity, discharge their batteries and purchase electricity from their peers to supply their deficit supply achieved the lowest electricity cost and highest profits for the electricity retailer. / Dissertation (MEng)--University of Pretoria, 2020. / Electrical, Electronic and Computer Engineering / MEng / Unrestricted

This thesis report provides a comprehensive analysis of the regulatory landscape governing Battery Energy Storage Systems (BESS) in Spain and offers insights into their operational optimization and economic viability. The study centers on a 40 MW BESS and explores three distinct case studies, each representing varying system durations (one, two, and four hours) and two different electricity price scenarios (2019 and 2022). A techno-economic analysis encompassing all scenarios concludes the investigation. The research findings reveal that BESS projects can be financially lucrative when operating under the 2022 scenario, particularly when participating in Spain's Wholesale and Secondary Regulation service (aFRR) markets. Notably, as the system duration increases, project profitability also rises, with Net Present Values (NPVs) amounting to 29.6 M€, 50.4 M€, and 80.6 M€ for one-hour, two-hour, and four-hour BESS durations, respectively. However, this trend is not consistent, as observed in the 2019 scenario, where the opposite holds true due to significantly lower prices in both Wholesale and Secondary Regulation service markets, resulting in negative NPVs that increase with longer BESS durations (specifically, -3.3 M€, -6.9 M€, and -17.7 M€ for one-hour, two-hour, and four-hour BESS durations, respectively). In terms of optimal dispatching strategy, the study identifies consistent patterns across all case studies and scenarios. The BESS prioritizes participation in the Secondary Regulation service due to its higher remuneration compared to arbitrage activities in the Wholesale market. Despite Spain's efforts to promote the adoption of BESS technologies, several barriers exist that could impede their deployment. Key challenges include the absence of Capacity Markets (CM), restrictions on BESS participation in technical constraints and black-start markets, and the lack of remunerated markets for Frequency Control Reserve (FCR) and voltage control. In summary, this study highlights the need for a more investor-friendly environment characterized by greater revenue stream certainty and streamlined administrative processes. / Denna avhandling ger en omfattande analys av den reglerande landskapskontexten som styr batterilagringssystem (BESS) i Spanien och ger insikter om deras drifts- och ekonomiska livskraft. Studien fokuserar på en 40 MW BESS och utforskar tre olika fallstudier, var och en representerar varierande systemtider (en, två och fyra timmar) och två olika elprisscenarier (2019 och 2022). En teknisk-ekonomisk analys som omfattar alla scenarier avslutar undersökningen. Forskningsresultaten visar att BESS-projekt kan vara ekonomiskt lönsamma när de verkar enligt 2022-scenariot, särskilt när de deltar i Spaniens grossist- och sekundärregleringstjänst (aFRR) marknader. Inte minst ökar lönsamheten i projektet när systemtiden förlängs, med nuvärdet (NPV) uppgår till 29,6 M€, 50,4 M€ och 80,6 M€ för BESS-varaktigheter på en timme, två timmar respektive fyra timmar. Denna trend är dock inte konsekvent, som observerats i 2019-scenariot, där motsatsen gäller på grund av betydligt lägre priser både på grossist- och sekundärregleringsmarknaderna, vilket resulterar i negativa NPV-värden som ökar med längre BESS-varaktigheter (specifikt -3,3 M€, -6,9 M€ och -17,7 M€ för BESS-varaktigheter på en timme, två timmar respektive fyra timmar). När det gäller optimal distributionsstrategi identifierar studien liknande mönster i alla fallstudier och scenarier. BESS prioriterar deltagande i sekundärregleringstjänsten på grund av dess högre ersättning jämfört med arbitrageaktiviteter på grossistmarknaden. Trots Spaniens ansträngningar att främja antagandet av BESS-teknologier finns det flera hinder som kan hämma deras utrullning. Viktiga utmaningar inkluderar frånvaron av kapacitetsmarknader (CM), begränsningar för BESS-deltagande i tekniska begränsningar och svartstartmarknader, samt avsaknaden av marknader med ersättning för frekvensreglering (FCR) och spänningsreglering. Sammanfattningsvis belyser denna studie behovet av en mer investerarvänlig miljö präglad av större säkerhet i intäktsströmmar och förenklade administrativa processer.

Det finns en ökande efterfrågan på förnybar elproduktion och effektiva lösningar att kombinera med denna. Ett flertal tidigare arbeten har undersökt energilagringssystem (ESS) och dess lönsamhet i olika tillämpningar. Det råder en osäkerhet kring lönsamheten hos ESS för ökad självkonsumtion i Sverige. Detta arbete undersöker lönsamheten hos batterilagringssystem (BESS) som används i syftet att öka självkonsumtionen för aktörer med solceller i den svenska bostadssektorn. En modell konstruerades baserat på Levelized Cost of Storage (LCOS), och indata till modellen varierades för olika scenarier. Resultaten visade att BESS kostnader i dagsläget är för höga, med LCOS mellan 1,68 kr/kWh och 3,56 kr/kWh beroende på aktör och indata. För lönsamhet krävs reduktion av LCOS mellan 55% och 85%. Vidare undersöker arbetet vilka variabler som har störst påverkan på BESS lönsamhet. En känslighetsanalys genomfördes, där CAPEX, antalet battericykler per år, WACC och skattereduktioner vid elhandel identifierades som viktiga variabler. Arbetet visade att det antagligen krävs en kombination av högre elpriser och reducerade investeringskostnader för att motivera en investering i BESS. Utöver ökad självkonsumtion behövs ytterligare värden för att motivera en investering i BESS inom en snar framtid. / There is a growing demand for renewable power generation and efficient solutions to combine with renewables. Previous works have explored energy storage systems (ESS) and their profitability in various applications. There is an uncertainty about the profitability of ESS for increased self-consumption in Sweden. This thesis explores the profitability of battery energy storage systems (BESS) used for increased self-consumption for stakeholders with solar photovoltaics in the Swedish residential sector. A model based on levelized cost of storage (LCOS) was constructed, and varying input values were used for different scenarios. The results showed that the current cost of BESS is too high, with LCOS ranging between 1,68 SEK/kWh and 3,56 SEK/kWh depending on the stakeholder as well as input data. For profitability, a reduction of LCOS between 55% and 85% is needed. Furthermore, this thesis explores which variables have the greatest effect on a BESS’s profitability. A sensitivity analysis was conducted, where CAPEX, the number of battery cycles per year, WACC and tax reductions linked to electricity trading were identified as important variables. This thesis concluded that higher electricity prices in combination with reduced investment costs is needed to justify an investment in BESS. Besides increased self-consumption, other values are needed to justify an investment in a BESS in the near future.

Detta examensarbete utreder den tekniska och ekonomiska passbarheten av batterilagringssystem (BESS) inom den svenska el infrastrukturen. Syftet är att konstruera tre olika affärsfall för att representera den tekniska och den ekonomiska passbarheten av BESS inom den svenska el infrastrukturen, specifikt med uppkoppling mot distributionsnätverket på den regionala nivån, 6 kilovolt till 132 kilovolt (kV). Affärsfallen adresserar dem tekniska funktioner och kunder inom infrastrukturen som utifrån en litteraturstudie anses vara dem mest attraktiva att bygga ett affärsfall utifrån. Litteraturstudien utreder den svenska el infrastrukturens struktur samt dess existerande och uppkommande utmaningar. Studien utforskar även hela spektrumet energilagringssystem (ESS) för att rättfärdiga valet av litium-jon BESS. Litium-jon BESS är närmare undersökt, där systemets operativa parametrar samt komponenter är kartlagda. Vidare undersöks dem tekniska funktionernas tekniska krav och ekonomiska incitament i en marknadsanalys. Slutligen utforskas regler och lagar omkring BESS implementering i den svenska el infrastrukturen samt placeringen och de kostnader för att bygga en BESS anläggning. De tre affärfallen som är konstruerade i denna studie är: Kombinationen av frekvensrelaterade nätverksstödtjänster för en fristående BESS-tillgångsoperatör. Avbrottsfri strömtillförsel för ett datacenter. Skala effekttoppar och kombination av frekvensrelaterade nätverksstöddtjänster för en industri. Litium-jon BESS anses vara den mest tillämpliga tekniken på grund av dess snabba responstid, höga effekt- och energidensitet samt skalbarheten för att passa majoriteten av de tekniska funktioner som undersökts inom studien. Affärsfallens ekonomiska passbarhet utvärderas efter två ekonomiska indikatorer, nuvärdesberäkning (NPV) samt återbetalningstiden. Affärsfall nummer tvås tekniska funktion erbjuder ingen möjlighet att generera en inkomst vilket gör att den kommer bli utvärderad efter kostnad för service, där utgifterna är uppdelade utöver projektets livstid genom linjär amortering. Vidare används linjär amortering för att räkna ut kostnaden per kilo sparat CO2 utöver livstiden på projektet. Både affärsfall 1 (NPV= 231,0 MSEK, återbetalningstid= 7,8 år) samt affärsfall 3 (NPV= 17,3 MSEK, återbetalningstid= 8,8 år) visar en lönsamhet där affärsfall 2 ger en kostnad för service mellan 5,4 och 5,8 MSEK/år och där kostnaden per sparat kilo CO2 mellan 20,9 och 22,7 SEK/kg CO2. Denna studie fokuserar på de tre största distributionsnätverksoperatorerna (DNO) inom distributionsnätverket på en regional nivå: Vattenfall, Eon och Ellevio. Lönsamheten av de undersökta affärsfallen är starkt kopplade till placeringsområde inom nätverket, spänningsnivån och typ av DNO. Möjlighet att koppla upp BESS till en existerande transformatorstation på anläggningen för affärsfall två och tre minskar investeringskostnaden samt driftkostnaderna vilket vidare förbättrar dess lönsamhet. Affärsfall ett behöver gå igenom en noggrann bedömning för att försäkra sig om lönsamheten. NPV samt återbetalningstiden kan påverkas i affärsfall ett och tre på grund av den ständigt förändrande frekvensregleringsmarknaden där priserna är volatila på grund av nya marknadsinitiativ. Att konstruera ett BESS affärsfall medför att flertalet osäkerheter bör räknas in, såsom de ekonomiska incitamenten som inte visar någon garanti på att vara fortsatt lönsamt. Det höga priset på litium-jon batterier saktar ner attraktiviteten av affärsfallen och måste vidare sjunka för att främja ett lönsamt affärsfall. Andra ESS som flödesbatterier och vätgaslagringssystem visar god passbarhet att bli implementerad i den svenska el infrastrukturen men måste vidare utveckla sin tekniska och kommersiella mognadsgrad innan dem kan vara konkurrenskraftiga med litium-jon BESS.  Examensarbetet är utfört i samarbete med Omexom Infratek Sverige AB med målet att bidra till en större förståelse av BESS roll i den svenska el infrastrukturen och vidare bidra till att konstruera ett tekniskt erbjudande för Omexom Infratek Sverige AB. / This master thesis investigates the technical and economic feasibility of battery energy storage systems (BESS) in the Swedish electrical infrastructure. The aim is to construct three business cases to represent the technical and economic feasibility of BESS implementation in the Swedish electrical infrastructure in the distribution network on the regional level, 6 kilovolts to 132 kilovolts (kV). The business cases address the technical functions and customers within the infrastructure that is recognized through a literature study to build the most attractive and incentivized business cases from. The literature study investigates the Swedish electrical infrastructure’s structure and its existing and upcoming challenges. It investigates the spectrum of energy storage systems (ESS) to justify the choice of the lithium-ion (Li-ion) BESS. The Li-ion BESS is closer examined, where the systems operational parameters and components are mapped out. Furthermore, the technical functions technical requirements and economic incentives are investigated in a market analysis. Lastly, considerations regarding regulations and permits, the placement of BESS within the infrastructure and its surrounding costs is evaluated. The three business cases that are constructed within the thesis are:  Combination of frequency related grid support services for a standalone BESS asset operator. Uninterruptable power supply for a data center. Peak shaving and a combination of frequency related grid support services for an industrial plant.  The, Li-ion BESS is considered to most applicable technology due its fast response time, high power and energy density and scalability to suit the majority of technical functions investigated in the thesis. The business cases economic feasibility is evaluated after two economic indicators, the net present value (NPV) and the payback period. Business case two’s technical function offers no possible revenues and is evaluated as a cost for service where the expenses is divided throughout the project lifetime through linear amortization and the cost per saved kg CO2 is calculated over the lifetime of the BESS. Both business case 1 (NPV= 231.0 MSEK, payback period= 7.8 years) and case 3 (NPV=17.3 MSEK, payback period= 8.8 years) show profitability where business case 2 gives a cost per service between 5.4 and 5.8 MSEK/year and cost per saved kg CO2 between 20.9 and 22.7 SEK/kg CO2.  This thesis focuses on the three largest distribution network operators (DNO) in the distribution network on a regional level: Vattenfall, Eon, and Ellevio. The profitability of the business cases investigated are strongly connected to the location in the network, the voltage connection level, and the type of DNO. Being able to connect to an existing substation on site as for business cases 2 and 3 will lower the capital and operational costs and further improve the profitability. Business case 1 needs a thorough assessment of placement in the electrical infrastructure in Sweden to assure profitability. The NPV and payback period in business cases 1 and 3 could conflict with the interchanging frequency regulation market where prices are rather volatile due to new market initiatives. Therefore, looking forward, building a BESS business case to be implemented comes with lots of uncertainties as the economic incentives shows no guarantee to continuously be profitable. The high price of Li-ion batteries is slowing down the attractiveness of the business cases and need to further decrease to promote profitable business cases. Other ESS technologies as flow batteries and hydrogen storage systems show good applicability to be implemented in the Swedish electrical infrastructure but needs to develop its technical and commercial maturity until it can become competitive with Li-ion BESS.  The master thesis is performed in conjunction with Omexom Infratek Sverige AB with the aim to contribute to a broader understanding of the role of BESS in the Swedish electrical infrastructure and to help building BESS technical offers for Omexom Infratek Sverige AB.

The domestic sector will play an important role in the decarbonisation and decentralisation of the energy sector in the future. Installation numbers of building-integrated small-scale energy systems such as photovoltaics (PV), wind turbines and micro-combined heat and power (CHP) have significantly increased. However, the power output of PV and wind turbines is inherently linked to weather conditions; thus, the injected power into the public grid can be highly intermittent. With the increasing share of renewable energy at all voltage levels challenges arise in terms of power stability and quality. To overcome the volatility of such energy sources, storage technologies can be applied to temporarily decouple power generation from power consumption. Two emerging storage technologies which can be applied at residential level are hydrogen systems and vanadium-redox-flow-batteries (VRFB). In addition, the building-integrated energy sources and storage system can be combined to form a hybrid renewable energy system (HRES) to manage the energy flow more efficiently. The main focus of this thesis is to investigate the dynamic performance of two emerging energy storage technologies, a hydrogen loop composed of alkaline electrolyser, gas storage and proton exchange membrane (PEM) fuel cell, and a VRFB. In addition, the application of building-integrated HRES at customer level to increase the self-consumption of the onsite generated electricity and to lower the grid interaction of the building has been analysed. The first part deals with the development of a research test-bed known as the Hybrid Renewable Energy Park (HREP). The HREP is a residential-scale distributed energy system that comprises photovoltaic, wind turbine, CHP, lead acid batteries, PEM fuel cell, alkaline electrolyser and VRFB. In addition, it is equipped with programmable electronic loads to emulate different energy consumption patterns and a charging point for electric vehicles. Because of its modular structure different combinations of energy systems can be investigated and it can be easily extended. A unified communication channel based on the local operating network (LON) has been established to coordinate and control the HREP. Information from the energy systems is gathered with a temporal resolution of one second. Integration issues encountered during the integration process have been addressed. The second part presents an experimental methodology to assess the steady state and dynamic performance of the electrolyser, the fuel cell and the VRFB. Operational constrains such as minimum input/output power or start-up times were extracted from the experiments. The response of the energy systems to single and multiple dynamic events was analysed, too. The results show that there are temporal limits for each energy system, which affect its response to a sudden load change or the ability to follow a load profile. Obstacles arise in terms of temporal delays mainly caused by the distributed communication system and should be considered when operating or simulating a HRES at system level. The third part shows how improved system models of each component can be developed using the findings from the experiments. System models presented in the literature have the shortcoming that operational aspects are not adequately addressed. For example, it is commonly assumed that energy systems at system level can respond to load variations almost instantaneously. Thus, component models were developed in an integrated manner to combine theoretical and operational aspects. A generic model layout was defined containing several subsystems, which enables an easy implementation into an overall simulation model in MATLAB®/Simulink®. Experimental methods were explained to extract the new parameters of the semi-empirical models and discrete operational aspects were modelled using Stateflow®, a graphical tool to formulate statechart diagrams. All system models were validated using measured data from the experimental analysis. The results show a low mean-absolute-percentage-error (<3%). Furthermore, an advanced energy management strategy has been developed to coordinate and to control the energy systems by combining three mechanisms; statechart diagrams, double exponential smoothing and frequency decoupling. The last part deals with the evaluation, operation and control of HRES in the light of the improved system models and the energy management strategy. Various simulated case studies were defined to assess a building-integrated HRES on an annual basis. Results show that the overall performance of the hydrogen loop can be improved by limiting the operational window and by reducing the dynamic operation. The capability to capture the waste heat from the electrolyser to supply hot water to the residence as a means of increasing the overall system efficiency was also determined. Finally, the energy management strategy was demonstrated by real-time experiments with the HREP and the dynamic performance of the combined operation has been evaluated. The presented results of the detailed experimental study to characterise the hydrogen loop and the VRFB as well as the developed system models revealed valuable information about their dynamic operation at system level. These findings have relevance to the future application and for simulation studies of building-integrated HRES. There are still integration aspects which need to be addressed in the future to overcome the proprietary problem of the control systems. The innovations in the HREP provide an advanced platform for future investigations such as electric-vehicles as decentralised mobile storage and the development of more advanced control approaches.

The awareness of the problems with fossil energy sources have increased the past decades. To decrease the effects of the fossil fuels on the climate and the environment, the use of intermittent energy sources such as solar- and wind power are increasing. Intermittent generation creates instability in the power grid, which cause fluctuations in the voltage and the frequency of the power grid. To be able to handle these fluctuations, regulating capacity such as for example pumped storage or batteries are needed. This thesis has investigated how the placement and the power capacity of a battery energy storage system affects the possibility for frequency and voltage regulation in a weak distribution grid. The investigation was made in MATLAB Simulink by creating a weak radial distribution grid with a high penetration of solar power. The distribution grid had variable loads with different power consumption at each bus, creating instability in the distribution grid. The optimal placement of a battery energy storage system is firstly at the largest load and secondly as far away from the other power generation units as possible. A battery storage with a power capacity that can handle all consumption is optimal. It is possible to have a smaller power capacity if the grid is stable enough to withstand the appearing fluctuation of frequency or voltage. The frequency variations are more dependent on the power capacity and the voltage variations are more dependent on the placement of the battery energy storage system. ISSN:

In recent years, power systems are facing with various challenges arising from the increased share of renewable energy systems. Among all sections of power systems, distribution grids are affected the most since the majority of renewable energy sources are connected to distribution grids. As the penetration of Variable Energy Sources increases in electric grids, energy storage systems have become more influential. In this context, this thesis presents a new algorithm for the optimal operation of Battery Energy Storage Systems in distribution grids. The proposed algorithm aims to define the optimal operation of Battery Energy Storage Systems considering the network topology, the output power of Variable Energy Sources and the electricity prices from the one-day ahead electric market as well as real time control of the batteries through smart appliances. In order to do this, firstly a comprehensive study on the existing Optimal Power Flow methods is carried out. Then, AR-OPF which is a novel Optimal Power Flow method for radial distribution systems is presented and the required mathematical constraints, equations and parameters of Battery Energy Storage Systems for modelling in distribution systems are described. Then, the problem formulation and the proposed algorithm are discussed in detail. Further to energy storage as the main function of Battery Energy Storage Systems, the impact of the proposed method on other functions of Battery Energy Storage Systems such as voltage control, grid support and loss reduction will be investigated. In order to do so, the proposed algorithm is applied to the IEEE 34 node test system as a case study. This will be carried out through defining several different scenarios. Finally, a sensitivity analysis is performed on the size of the existing batteries and the electricity price. The thesis will be concluded by the findings and possible future works.