418
1, FEBRUARY 2009
A Stochastic Optimization Approach
to Rating of Energy Storage Systems
in Wind-Diesel Isolated Grids
Chad Abbey, Student Member, IEEE, and Géza Joós, Fellow, IEEE
Abstract—Wind-diesel systems represent a proactive step to-
wards sustainable remote communities. However, for high ratios of
wind energy, the necessity of a dump load and the diesel operating
constraints need to be considered. Energy storage systems offer a
means of optimizing energy use and further reducing consumption
of diesel fuel. This paper proposes a methodology for storage sizing
based on stochastic optimization. The problem is formulated and
solved using representative data. The dependence of storage sizing
and the cost of delivered energy on wind penetration levels, storage
efficiency, and diesel operating strategies are considered. Results
demonstrate that for high wind penetration, the availability of
storage, together with an appropriate diesel operating approach,
can result in significant cost savings in terms of fuel and operating
costs.
Index Terms—Energy storage, power generation planning,
power systems economics, stochastic systems, wind energy.
I. NOMENCLATURE
The following describes the nomenclature used for various
variables and parameters throughout the paper. Boldface is used
to denote vectors and matrices.
Energy state at time, .
Energy rating of energy storage system.
Energy of the load over a 24-h period.
Initial energy state of energy storage system.
Total delivered wind energy over a 24-h period.
Energy storage charging power at time, .
Diesel generator power at time, .
Dump load power at time, .
Energy storage system discharging power at time,
.
Load power at time, .
Wind power at time, .
Manuscript received March 12, 2008; revised July 11, 2008. First published
December 16, 2008; current version published January 21, 2009. This work was
supported in part by the Natural Sciences and Engineering Research Council of
Canada. Paper no. TPWRS-00200-2008.
The authors are with Power Engineering Research Laboratory, Department
of Electrical and Computer Engineering, McGill University, Montreal, QC H3A
2A7, Canada.
Color versions of one or more of the figures in this paper are available online
at http://ieeexplore.ieee.org.
Digital Object Identifier 10.1109/TPWRS.2008.2004840
0885-8950/$25.00 © 2008 IEEE
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 24, NO.
Power rating of energy storage system.
Diesel minimum power constraint.
Ratio of daily wind energy to load energy, or also
termed daily energy penetration.
Wind installed power penetration level.
Binary variable associated with diesel plant
dispatch at time, .
Random variable associated with each scenario,
relating the probability of a given combination of
, .
Vector of first stage decision variables.
Vector of second stage decision variables.
Efficiency of energy storage charging and
discharging processes.
Price of energy supplied by diesel power, in
$/kWh.
Cost of storage energy capacity, in $/kWh.
Cost of storage power capacity, in $/kW.
Price of energy supplied by wind power, in $/kWh.
Hourly correlation coefficient between wind power
and load.
II. INTRODUCTION
S USTAINED growth of wind suggests that it will ultimately
become a significant component of generation portfolios of
many of the major power systems in the near future. With this
expanding role, means to deal with its intermittency will need to
be invoked to ensure that the reliability of the system is upheld.
Isolated power systems are no exception, as even in remote com-
munities people are turning to wind to help in absolving them-
selves of, or at least limiting their dependence on fossil fuels,
which is generally diesel in the case of remote power systems
[1]–[3].
This evolution has created a potential role for energy storage
technologies, with balancing power for intermittent renewables
energy touted as one of its possible applications. Although, in
theory this is almost self-evident, the economic justification
is not. These technologies remain onerous and therefore, they
must be linked to a quantifiable value stream in order to gauge
the rating of the ESS that is required to ensure a sufficient
return. Also, given that the energy storage system (ESS) must
ABBEY AND JOÓS: A STOCHASTIC OPTIMIZATION APPROACH TO RATING OF ENERGY STORAGE SYSTEMS IN WIND-DIESEL ISOLATED GRIDS
be rated both in terms of power and energy capability, and
that wind energy is a stochastic energy source, increases the
dimensions of the problem.
Energy storage system sizing has been approached in much of
the literature by first considering optimal scheduling of the device
and then performing sensitivity analyses to determine the impact
of different ratings [4]–[10]. The parametric studies either inves-
tigate the impact on reliability indices [4] or an objective function
[5]–[8], which usually relates to the profit realized by the instal-
lation, or which may be a metric related to the performance of the
power system [9]. The results of these studies are quite useful
and can serve as an approach to optimal scheduling of the ESS.
The problem of storage sizing for remote communities has
been considered in the context of design of the energy supply
mix of the community to minimize the cost of energy served
[11]–[13]. In each of these references, both operational costs
and fixed costs are included in the optimization problem for-
mulation. Databases of monthly energy production from the
renewables energy sources (wind and photovoltaics) are used
to estimate the contribution from these sources. Reliability de-
sign criteria are then imposed through the use of adequacy con-
straints, which can be met through the inclusion of storage or
additional diesel capacity. Although useful as a pre-feasibility
assessment for energy storage, each approach neglects intraday
operational issues. Also, the different operating schemes of the
diesel back-up unit are not dealt with exhaustively, leaving some
unanswered questions.
An alternative is the use of stochastic optimization tech-
niques. These have been applied to various problems in power
systems to address uncertainties. In [14], Galiana et al. pre-
sented both the deterministic and stochastic formulations for
the problem of scheduling different power system reserves.
The scheduling of a hydro plant in a thermal based system was
solved using a stochastic formulation of the problem in [15],
while in [16], the dispatch of distributed generation units was
considered using the same theory.
This paper considers the problem of sizing of ESS for iso-
lated wind-diesel power systems using stochastic optimization.
In Section III, the problem is described and formulated as a sto-
chastic optimization problem to capture the uncertainty associ-
ated with the daily energy penetration of the wind and its corre-
lation with the load. The problem is posed firstly with only con-
tinuous variables, and then as a mixed-integer formulation that
considers unit commitment of the diesel plant. In Section IV, re-
sults are given along with a sensitivity analysis to consider the
impact of wind power penetration, ESS efficiency, and opera-
tional modes on the sizing of the ESS and the cost of the energy
served.
III. PROBLEM DESCRIPTION
A. System Overview
1) Wind-Diesel System: The majority of remote systems con-
sist of a distributed load that is supplied by diesel generators,
which serves as the balance of plant. Other elements of the re-
mote power system may include: renewable energy (wind, pho-
tovoltaics, small hydro), a dump load possibly one or more ESS
technologies (see Fig. 1). The diesel plant remains the control
element for frequency and voltage for wind-diesel systems. The
419
Fig. 1. Remote wind-diesel power system with an energy storage system.
dump load is used to manage the wind provided to the commu-
nity, or stated otherwise, to regulate the loading on the diesel
unit(s).
This will generally remain unchanged in the presence of ESS,
even though the balance of plant could be shared with the ESS or
even accorded solely to the ESS for limited periods. In this paper
we will consider the results for both status quo (diesel is always
scheduled on) as well as unconventional operating schemes.
2) Wind and Load Characteristics: The problem of energy
storage sizing is related to tapping into a revenue stream that
allows the developer to recover the costs associated with the in-
stallation (as well as operational costs). For remote power sys-
tems this revenue is achieved by avoiding the dumping of energy
via the dump load. The degree of dumped wind energy depends
on: the diesel operating strategy (and how this impacts the op-
erational constraints of the wind park), the amount of wind en-
ergy produced, and its correlation with respect to the community
load.
An overriding assumption is that the most important cycling
of the ESS occurs over daily periods and as a result the rela-
tionship between load and the wind resource needs to be estab-
lished over this interval. To facilitate the modeling of the wind
resource and its relationship to the community load, we will re-
quire a number of metrics. The wind power penetration will be
defined as
(1)
where is the installed capacity of the wind park and is
the peak load of the community. The daily energy penetration,
which provides a measure of the amount of wind energy pro-
duced during a given day compared to the total load for the day
will be given by
(2)
Finally, the correlation of the two profiles is vital as it pro-
vides an indication of when the peak of the wind power occurs
relative to the load peak, given by
(3)
420
Fig. 2. Methodology for energy storage system sizing for integration of wind.
where the subscripts and refer to the hourly wind power and
load time series; and denote the average value of the wind
and load; and correspond to their standard deviations,
and . itself constitutes a deterministic solution of the problem. In the
3) Diesel Operating Strategies: The operation strategy of the
diesel generator will play an important role in determining the
magnitude of dumped wind energy and consequently, the sizing
of the energy storage. Three different diesel operating strategies
will be considered, namely, minimum loading; low-load diesel
technologies; and diesel unit commitment.
Perhaps the most widespread is the use of a dump load in
order to ensure that the diesel generator is loaded at or above a
minimum value (30% of its rated capacity is typical). Generally
operation below these levels is avoided as it leads to reduction
in lifetime, may lead to fire hazards, and the efficiency gener-
ally degrades at low loadings [2]. However, remote communities
often have large differences between their peak and minimum
loads; even in the absence of wind, diesels may be forced below
this threshold.
New diesel generator technologies that utilize electronic fuel
injectors can lead to much improved operation well below 0.3
per unit, as they are able to maintain sufficient engine temper-
ature to avoid the build-up of particulate matter and can selec-
tively reduce the number of pistons in operation. These units
will be modeled by simply relaxing the low loading constraint.
Diesel unit commitment refers to the case where there is suffi-
cient wind power and stored energy (and power capacity) to shut
the diesel off during specific intervals. This is modeled using the
binary variable, , which will be designated “1” when the
diesel is in operation and “0” when it is shutdown. As will be
seen in the next section, these three modes imply different for-
mulations for the optimization problem.
B. Methodology
A generalized representation of the proposed methodology is
given in Fig. 2. The wind and load resource must be character-
ized in terms of random values and the optimization problem
is solved to determine what is the sizing of and . This
analysis considers scenarios of daily load and wind power pro-
files, weighted with the probabilities of their occurrence. Gen-
eration of these probabilities is described in the following sub-
section.
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 24, NO. 1, FEBRUARY 2009
Fig. 3. Scenario tree for stochastic optimization approach to ESS sizing.
1) Scenario Generation: As mentioned above, each scenario
is a 24-h period of wind and load for the community. Each by
two-stage stochastic formulation [17], the second stage vari-
ables are specified for each scenario, while the first stage vari-
ables are common to each. For our problem, the scheduling
for each scenario is flexible—one is not obliged to consider
how storage was scheduled the month before1 —whereas rat-
ings must be defined before the installation is constructed, and
obviously is shared across scenarios (see Fig. 3).
We define the random variable associated with each
of the scenarios, which is the probability of a wind and load
daily profile having a certain correlation coefficient, and of
a certain energy ratio, . Assuming that and are
independent the probability of is given by
(4)
whose distribution can be plotted through analysis of databases
of wind power and load data. Obviously the larger the database
the better; however it should at least span an entire year to ac-
count for seasonal variations of the wind resource and the load.
2) ESS Storage Financing Model: Parameters for storage
characteristics and energy prices are required as part of the eco-
nomic calculations. In Section IV-A, a design example is uti-
lized to illustrate the concepts for realistic variables. Using the
fixed costs from Table II, the daily incremental costs associated
with amortization of the investment were calculated using the
following rudimentary calculation of annuity:
(5)
which converts to a $/kWh/day amount. The project
period, , is 20 years and the interest is compounded annually,
using a discount rate of 8.5%. The same approach was applied
for the power rating. These parameters are considered further in
the formulation of the optimization problem.
1There is actually a link between different days through the stored energy in
the ESS at the end of the day, e . This is accounted for in the formulation by
defining a third first stage variable E and a constraint that links it with e , (17).
ABBEY AND JOÓS: A STOCHASTIC OPTIMIZATION APPROACH TO RATING OF ENERGY STORAGE SYSTEMS IN WIND-DIESEL ISOLATED GRIDS 421

TABLE I The vector of first stage variables, , is given by

ENERGY PRICE DATA AND DIESEL CONSTRAINTS FOR BASE CASE
(7)

The rating of the ESS in terms of its power and energy, and
the initial energy state of the storage device, . The second
stage variables are given by the vector,
TABLE II
ENERGY STORAGE SYSTEM DATA FOR BASE CASE (8)

Representing the diesel, dump load, and ESS charging and

discharging powers for each time interval in the scenario, with
probability .
The optimization problem is subject to the following con-
*Typical ESS parameters were taken from [21] and corroborated using [22]. straints.
1) Power Balance:
C. Problem Formulation
The sizing of the ESS must rationalize the costs associated
with the installation (both fixed and operating costs) with the (9)
monetary benefit that it brings to the system. In many cases there
are less tangible benefits that although real are not monetized Typical distribution losses are small (5%) but may be ex-
and attributed to the ESS. However, we will concern ourselves treme in some cases (15%). However, the effect in terms of the
with those where a real value stream is in place. The problem is problem is simply that of additional load. There will be a small
to determine how much storage capacity is required in order to effect on storage sizing (slightly smaller rating) but it has been
minimize the supplied daily energy of a wind-diesel plant. neglected here.
Before proceeding further we state the following assump- 2) Diesel Constraints:
tions:
(10)
• and are uncorrelated;
• dumped energy is lost as waste heat, i.e., it is not used to Or in the case where the diesel is allowed to shutdown—this
source local heating loads; assumes that the balance of plant functionality is performed by
• direct load control is not considered. the ESS during these periods—then (10) becomes
The first is required only to use the simplified equation for
calculation of the , if it is not true it only complicates the (11)
calculation of these probabilities. The second makes the ESS
sizing case optimistic as the revenue for avoided dump load is This introduces binary variables, which complicates the
equivalent to the cost of producing that energy. Systems do exist solution of the optimization problem, requiring mixed integer
where this is not valid and the formulation would need to be solvers, such as [18].
modified in consequence. Demand-side management (DSM) or 3) Dump Load Constraints:
direct load control (DLC) could also be employed as alternatives
to or in concert with ESS; however, they are excluded from the (12)
current formulation.
Bearing these assumptions in mind, the problem can be stated 4) ESS Power Constraints:
formally as
(13)

(14)
(6)
5) ESS Energy Rating Limits:

where the operating costs are calculated over all time points, (15)
. The operator calculates the expected value of the
operating costs over the random variable, . The cost associated 6) Energy Transition:
with wind power is included in the objective function. However,
the cost of wind energy has no bearing on the rating of the energy (16)
storage system due to the fact that the decision variables can in
no way impact the quantity of wind energy produced. The cost
of wind energy is only included to calculate a representative cost Also, as a means of respecting the fact that the storage should
of energy served. not completely neglect the requirements of the following day,
422 IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 24, NO. 1, FEBRUARY 2009

a constraint is imposed on the energy at the end of the profile,

such that it must be equivalent to the initial energy

(17)

This final constraint, although required here in the ESS rating

problem need not necessary be respected by an online oper-
ating algorithm. For the problem under discussion, this con-
straint serves to link the different scenarios using the energy in
the device at the end (or beginning) of the interval. Another point
worth mentioning is that neither nor appear in the objec-
tive function. A modification to the formulation could include
these if it were of interest to penalize certain states-of-charge,
for instance deep discharges. This would require more in-depth Fig. 4. Discrete probability distribution of the correlation factor between daily
wind power and load.
knowledge of the characteristics of the ESS technology in ques-
tion and appropriate costs associated with these specific oper-
ating points.

IV. RESULTS AND DISCUSSION

The formulation of the problem is now applied to a specific
case to illustrate the application of the model and the advantage
of a stochastic formulation of the problem. This is followed by
parametric analysis where the impact of key parameters on the
solution are considered, namely: installed wind power capacity,
ESS efficiency, and the operating strategy of the diesel plant.

A. Design Example
A design example is utilized for the investigation and to
permit verification of models in the event the model is to be
reproduced by others. The data requirements are discussed in
the following subsections.
1) Economic Parameters: Input parameters for the economic
models are included in Tables I and II. The energy prices as-
sociated with diesel fuel and small wind vary significantly in
remote communities but the values chosen fall in the set of re-
alistic values, as supported by [19] and [20], respectively. After
establishing a realistic range, the ultimate values for the base
case were selected such that the sizing was favorable (as op-
posed to results where the ESS sizing was zero). This was done
to facilitate the analysis but was deemed reasonable as the cost
of diesel is expected to rise whereas the cost of wind energy will
also rise but at a more moderate rate. As the cost of diesel was
varied, the ratio of the cost of wind energy to diesel energy was
kept constant at two-thirds.
2) Wind and Load Characteristics: Ideally the wind and load
data should be collected over several years, but for practical rea-
sons (e.g., budget, time constraints) this may not be possible. As
a minimum, one year of data should be used in order to capture
seasonal variations. The wind and load data for the current study
was taken from references [23] and [24], respectively. These
sources provide hourly wind speeds and load magnitudes for all
hours of the year.
The wind speeds were converted to powers using the wind
power curve from the Entergrity 50-kW wind turbines [25]. The
wind park model applies a scaling factor for the number of tur-
bines, neglecting array losses and forced outage rates. The wind
power tends to peak in the winter months whereas the load has
peaks in both the winter and summer months. While the seasonal
Fig. 5. Discrete probability distribution of daily wind energy penetration, r
for r = 05: .
correlation gives a general idea of how the two are matched,
their daily correlation will dictate the magnitude of the dumped
energy.
The distributions of and were then calculated (see
Figs. 4 and 5). These were divided into discrete divisions, the
number depending on the total number of scenarios to be mod-
eled. Obviously, the greater number of scenarios used the closer
the results will represent the true data, the tradeoff being com-
putational efficiency. The actual wind profile used for each sce-
nario was generated by multiplying a base load profile by
and then time shifting to achieve the desired . It is important
to note that the resulting wind profile is not unique, as there are
an infinite number of wind profiles that could be used to obtain
the required and .
B. Base Case Results
A rudimentary approach to sizing is to solve a deterministic
formulation of the problem considering the expected values of
and . This approach could be extended to all 365 days.
However, this is equivalent in computational intensity to 365
scenarios of the stochastic formulation, and if multiple years are
included the problem soon becomes intractable. Therefore, the
stochastic solution captures the probabilities of these two vari-
ables, achieving similar levels of accuracy but with significantly
less computational requirements than simulation of the full data
set.
ABBEY AND JOÓS: A STOCHASTIC OPTIMIZATION APPROACH TO RATING OF ENERGY STORAGE SYSTEMS IN WIND-DIESEL ISOLATED GRIDS
TABLE III
ENERGY STORAGE SYSTEM SIZING BASE CASE RESULTS
CONSIDERING THE NUMBER OF SCENARIOS
As the number of cases is increased, the formulation more
accurately represents the combined probability distributions of
the two random variables, and . The number of sce-
narios becomes sufficient when the ESS ratings converge and
the value of additional scenarios—given by the difference be-
tween expected costs and true costs (calculated using the next
level of scenarios)—is sufficiently small. The more scenarios,
the greater the computational burden and thus a tradeoff must
be made at some point. In contrast, a Monte Carlo approach
would use thousands of simulations, each coming up with op-
timal values for the ESS ratings. This would yield a distribution
of energy storage ratings, with the expected value being the op-
timal rating of the device.
Table III gives the results for the base case, for increasing
number of scenarios, for both the continuous and binary formu-
lations of the problem. All formulations of the problem were de-
fined in MATLAB and solved using an interface to GAMS, [18].
There are a couple of important observations to make. First,
the ratings of and both decrease with the number of
scenarios and eventually level off once four or more slices are
used for each distribution (25 scenarios). Also, the true cost of
energy2 decreases in a similar manner as the ratings. This pro-
vides a means of assessing when additional scenarios no longer
provide additional benefit. A third observation is that there is a
significant difference in cost for the binary and continuous so-
lutions, a fact that will be explored in greater detail later.
C. Sensitivity Analysis
In this section the impact of economic parameters, the wind
resource, ESS efficiency, and diesel operating strategy are con-
sidered. The problem is solved using the base case values and for
two additional cases when relevant: the case with no ESS and
when the capital costs of the ESS are neglected.3 These latter
two cases represent extremes and facilitate interpretation of the
results and discussion.
1) Economic Parameters and Wind Load Correlation: In
Table IV, the effect of a reduction in capital costs of the ESS
2This is calculated by fixing the first stage variables to the determined optimal
for that case and running again using the maximum number of scenarios (81
scenarios).
3A nominal value (1/10000  ) was used to limit ESS sizing this case. Ef-
ficiency losses also serve to restrict ESS sizing.
423
TABLE IV
DEPENDENCE OF COST OF ENERGY SERVED AND ESS SIZING ON
CHANGES IN CAPITAL COSTS, DIESEL ENERGY COSTS, AND HOURLY
CORRELATION BETWEEN WIND AND LOAD
*When not indicated, the values of the parameters are as indicated for the base
case.
and an increase in diesel fuel price are considered, which rep-
resent possible future scenarios. In all cases, this leads to an in-
crease in the ESS ratings. Reductions in ESS capital costs have
a positive benefit on the price of energy served, whereas higher
diesel costs result in higher energy costs as it still represents the
largest share of the generated energy.
The extremes cases for wind-load correlation were consid-
ered. As load and wind are perfectly matched, the ESS sizing
drops to 0, as the dump load is used sparingly, effectively elim-
inating the value stream. Negatively correlated patterns imply
greater use of the dump load, and consequently a higher cost of
energy but also greater ESS capacity. The relationship between
load and wind is critical in identifying sites where the conditions
for ESS are favorable.
2) Installed Wind Capacity: The results associated with in-
creasing wind penetration are revealing in that they show that
in certain cases ESS sizing is nonzero, whereas as at low pen-
etrations, it is not at all justified. The most interesting range is
the medium to high penetration levels, as can be seen in the en-
ergy cost figures and rating, Figs. 6 and 7, respectively. There is
an optimum penetration level (for the present case it occurs at
) where ESS brings the greatest benefit and conse-
quently the sizing is the largest.
However, one must bear in mind that the overall benefit of
reduction of the cost of energy is very marginal—it is dubious
that the project would go forward given the associated risks (site
access issues, new technology). One can hope that reduction in
capital costs would help make things more attractive. The case
where capital costs are neglected in face gives the maximum
reduction in $/kWh possible. The sizing in this case is quite dif-
ferent as the concern becomes only optimizing the use of energy,
with the peak sizing occurring when the real sizing should ac-
tually be zero.
Interestingly, at extremely high penetration levels, with in-
stalled wind exceeding peak load, the ESS sizing again becomes
nonzero, with an increased ratio of energy sizing to power. The
storage attempts to shift all amounts of wind energy so that the
diesel always at its minimum loading (note that in Fig. 8, diesel
energy approaches 0.3). This is due to the fact that the cost of
wind and diesel power are not equal—were it the case, the sizing
would remain zero. However, these wind penetration levels are
difficult to justify as the costs again approach the cost of diesel
(0.60$/kWh).
424
Fig. 6. Cost versus wind penetration for: no ESS (dotted line), ESS (base case),
and ignoring the capital cost of ESS (heavy dashed line).
}
Fig. 7. Energy storage power (“O”) and energy (“ ”) ratings versus wind pen-
etration for base case (solid line) and ignoring capital costs (dotted line).
Fig. 8. Wind energy, diesel energy generation, total generated energy, dumped
energy, and storage energy rating versus wind penetration.
Fig. 8 shows the main energy components as a function
of wind penetration. It shows that ESS is only justified after
dumped energy becomes sufficiently large. Use of diesel en-
ergy decreases, due to increased wind energy and the ability of
storage to limit the dumped energy. At extreme penetrations
diesel energy approaches 0.3 as stated above.
3) Storage Efficiency: Considering the case of , inforce the observations from these results. The total generated
the role of storage efficiency was then considered; the results
are summarized here. In general, the cost of energy reduces and
ESS becomes more viable as efficiency improves, however, the
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 24, NO. 1, FEBRUARY 2009
Fig. 9. Cost versus wind penetration for: no ESS (dotted line), ESS base case
(solid line), and considering diesel generator shutdown (heavy dotted line).
}
Fig. 10. Energy storage power (“O”) and energy (“ ”) ratings versus wind
penetration for base case (solid line) and considering diesel generator shutdown
(dotted line).
changes are small. For the base case values, storage is not jus-
tified for efficiencies below 0.65 while improvements to
result in a less than 1 percent reduction in cost. Beyond 0.85,
the overall rating of the base case changes only marginally, sug-
gesting a design requirement in efficiency may only be to meet
a lower limit on .
4) Diesel Operating Strategy: Similar cases as in
Section IV-C.II were repeated, only now considering the
additional benefit that can be realized by allowing the ESS
to replace the diesel as the balance of plant during certain
intervals. The results are almost identical up to the point where
storage first becomes justified, beyond which the costs are
greatly reduced—at the cost of energy supplied is
reduced by nearly 12% (see Fig. 9). Furthermore the optimal
penetration level shifts further to the right ( com-
pared with 0.9) facilitating more efficient operation at extreme
penetration levels.
Considering the ratings of the ESS (see Fig. 10), it can be
noted that the energy ratings for the case with binary variables
at lower penetration levels are actually lower, whereas the peak
rating for the binary case occurs when the rating for the con-
tinuous case returns to zero. Plots of energies (see Fig. 11) re-
energy actually remains constant (dump load remains zero) up
to . This is reflected in the steep drop in diesel en-
ergy used, which is 20% lower at the upper end.
ABBEY AND JOÓS: A STOCHASTIC OPTIMIZATION APPROACH TO RATING OF ENERGY STORAGE SYSTEMS IN WIND-DIESEL ISOLATED GRIDS 425

be established; this value being 0.85 for the base case consid-
ered. Reduction of ESS capital cost appears to more importantly
translate to reduced energy costs. Perhaps the most striking re-
sults are the differences associated with various diesel operating
schemes, particularly when the diesel is allowed to shut-down
and let the ESS serve as the balance of plant. Under this case
the cost reduction compared with the base case is roughly 12%.
Taken together with the reduction of dumped energy, these re-
sults suggest that the combination of ESS and innovative diesel
operating practices can lead to not only a marketable reduction
in cost but also to more sustainable approaches of serving the
energy needs of remote communities.
Fig. 11. Wind energy, diesel energy generation, total generated energy, dumped
energy, and storage energy rating versus wind penetration considering diesel ACKNOWLEDGMENT
generator shutdown.
The authors would like to thank J. Restrepo for his valuable
comments and help with the use of the optimization problem
solver.

Fig. 12. Cost versus diesel minimum loading constraint for base case (dotted
line) and considering diesel generator shutdown (solid line).
As relinquishing control of the power system’s performance
to the ESS is still a fairly liberal move, the impact of using ad-
vanced low-load diesel was also considered. The costs for the
base case and diesel unit commitment modes initially start at the
same point but as increases the two diverge (see Fig. 12).
The base case increases almost linearly to the value obtained
in the first section. Costs in the unit commitment case remain
nearly constant.
V. CONCLUSIONS
This paper has considered the problem of energy storage
system sizing for isolated wind-diesel power systems. The
problem has been formulated as a two-stage stochastic opti-
mization problem, with the objective of minimizing the cost of
supplied energy. The approach has been applied to a represen-
tative case study and the impact of various parameters on ESS
sizing and energy costs were investigated, including: wind pene-
tration, ESS efficiency, and diesel operating strategy. For the base
case, the stochastic formulation of the problem resulted in a two-
thirds reduction in ESS power rating and half the energy rating
compared with the deterministic case (using the expected values).
Sensitivity analysis revealed that ESS has a role to play in
medium to high penetration scenarios but that the expected re-
duction in the cost of energy served (less than 1%) would not
normally be sufficient to justify inclusion of ESS in the design.
Storage efficiency does not significantly influence the cost; how-
ever, results show that a lower bound on one way efficiency can
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Géza Joós (M’82–SM’89–F’06) received the M.Eng.
and Ph.D. degrees from McGill University, Montréal,
QC, Canada.
He has been a Professor with McGill Univer-
sity since 2001. He is involved in fundamental
and applied research related to the application
of high-power electronics to power conversion,
including distributed generation and power sys-
tems. He has published extensively and presented
numerous papers and tutorials on these topics. His
employment experience also includes ABB, the
University of Quebec, and Concordia University. He has been involved in
consulting activities in power electronics and power systems, and with CEA
Technologies as the Technology Coordinator of the Power Systems Planning
and Operations Interest Group.
Dr. Joós is active in a number of IEEE Industry Applications Society com-
mittees and in the IEEE Power Engineering Society and CIGRE activities and
working groups dealing with power electronics and applications to distributed
resources. He is a Fellow of the Canadian Academy of Engineering.

Chad Abbey (S’01) received the degree B.Sc.

degree in electrical engineering from the University
of Alberta, Edmonton, AB, Canada, in 2002 and the
M.Eng. degree from McGill University, Montréal,
QC, Canada, in 2004, where he is currently pursuing
the Ph.D. degree.
His current research interests include wind energy,
distributed generation, energy storage, and their inte-
gration to the grid. He is presently working with the
CANMET Energy Technology Centre, in Varennes,
QC, where he is a Research Engineer and helps to co-
ordinate a joint research program on the modeling and integration of distributed
generation.
Mr. Abbey is an active member of CIGRE.