Economic Opportunities of Power Curtailment and Peak Shaving on Residential PV-BESS Systems

In low-voltage distribution networks, the high penetration of renewable energy generators in residential buildings has proven challenging for system operators. In response, the grid operators can reinforce the grid infrastructure or deploy battery energy storage systems throughout the network to compensate for the voltage fluctuations. Alternatively, new energy markets for ancillary services have been proposed to involve the prosumers; however, most are at medium and high voltage levels. This paper investigates, from a cost perspective, what conditions can make it attractive for individual prosumers to participate in a low-voltage ancillary service market, specifically power curtailment and peak shaving. We considered a prosumer with a 2 kWp PV system for both ancillary services, adding a 10 kWh battery for the peak shaving case. Curtailing power to comply with the maximum power exchange with the grid does not create any significant change in the LCoE of the PV system, keeping it near 0.072 €/kWh for permitted return grid powers above 1.25 kW. Scenarios closer to zero-injection increase exponentially the LCoE to 0.222 €/kWh. Using a semi-empirical ageing model, we estimated the degradation of the batteries for the cases with and without providing peak shaving, concluding that doing peak-shaving to avoid demanding more than 1 kW from the grid extends the battery life by up to 320 % while increasing its LCoS only 9.5 % when compared to a zero-consumption scenario due to the reduced depth-of-discharge and number of cycles. The results suggest that power curtailment and peak shaving can be attractive for prosumers, thus creating opportunities for ancillary services business models at the residential scale.