Ancillary services provided by residential ESSs in LV networks: Assessing the opportunity costs

The increasing penetration of distributed generation in LV distribution systems brings new challenges for distribution system operators (DSOs). For instance, the unpredictable generation of photovoltaic (PV) units may increase the effort of DSO in maintaining the demand/supply balance in the network. To this end, co-located energy storage systems (ESSs) can be a precious resource for improving the operation of PV units and increasing self-consumption of solar energy. On the other hand, DSO can take advantage of these assets by envisaging an ancillary service for improving voltage profiles based on the ability of ESSs to shift local demand/generation from a period to another period in time. To identify a fair remuneration for customers involved in providing the proposed ancillary service, we assess the opportunity cost of the forgone alternative: the cost of not self-consume solar energy. The proposal is tested on a typical LV Italian distribution network considering different scenarios and policies.