Optimal Operation of Distributed Energy Storage
Units for Minimizing Energy Losses
Alejandro Garces, Member IEEE Carlos Adrian Correa, Member IEEE
Department of Electrical Engineering Department of Electrical Engineering
Universidad Tecnologica de Pereira Universidad de La Salle
Pereira, Colombia Bogota, Colombia
alejandro.garces@utp.edu.co carcorrea@unisalle.edu.co
Abstract—This paper presents an algorithm for the optimal
scheduling of distributed energy storage units from the system
losses standpoint. An exact model based on Lagrange relaxation
is proposed. Simulation results on the IEEE 37-bus test feeder
demonstrate that an energy storage system can be used for min-
imizing transmission losses in a distribution system by reshaping
the load curve.
The main contribution of this approach is the objective
function and the optimization algorithm. Lagrange multipliers
are used for determining optimal placement and sizing of the
energy storage units. A discussion about the impact of energy
storage units on the distribution planning is also presented.
Index Terms—Energy storage, Optimization, Power distribu-
tion systems
I. I NTRODUCTION
Distributed energy storage units (DESU) have demonstrated
to be an efficient solution in low and medium power applica-
tions with high variability in load and/or generation [1]–[3].
They contribute to flatten the power curve and to increase the
stability in systems with high penetration of wind [4], [5],
photo-voltaic [6], [7], and/or wave energy [8] among other
renewable resources.
Different techniques have been proposed for optimal
scheduling of DESU. In most of the cases, discrete models
and heuristic approximations have been suggested due to
the complexity of the problem. The optimization algorithms
used in those applications include dynamic programming [9],
particle swarm [10] and genetic algorithms [11]. Different
objective functions such as cost reduction, power smoothing
and spinning reserve have been proposed [12]. However,
energy storage systems for minimizing transmission losses
have not been studied. DESU can be used as compensator
from the energy point of view. In other words, the objective
is to minimize energy losses instead of power losses as in a
conventional optimal power flow. In addition, the optimization
algorithm can take advantage of the three-phase converter that
is required for controlling the DESU, which can be used for
reactive power compensation.
This paper proposes a new optimization model for optimal
scheduling of DESU from the losses standpoint. In contradis-
tinction to heuristic approaches, the proposed algorithm uses
a Lagrange relaxation and a backward/forward sweep-based
load flow. To the best of the author’s knowledge there is not
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2014
c IEEE
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Operation Coordination Direction
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any similar approach to the problem despite its practical appli-
cability. The main advantage of using non-linear programming
approaches is the additional information that Lagrange multi-
pliers or dual variables can give about the optimal operation
of the system. This information is used for determining the
optimal placement and size of the DESU. Other objectives
such as minimal operative cost and power smoothing can be
also studied using the proposed methodology. Contrary to what
is expected, these objectives are not completely equivalent. In
some cases, the maximum spot price does not coincide with
the maximum load in the section of the distribution feeder that
is under study. In those cases, the optimization algorithm can
give different solutions according the objective function.
The paper is organized as follows: First, the model of the
DESU is described, followed by the proposed optimization
model for minimal losses based on Lagrange relaxation. After
that, simulation results on the IEEE 37-Bus test distribution
feeder are presented. Finally, the impact of energy storage on
the planning of distribution systems is discussed, followed by
conclusions.
II. M ODEL OF THE DESU
A clear disadvantage of electric energy is the difficulty of
storing for future needs. This has lead to research of different
energy storage technologies such as electrochemical, flywheel,
compressed air, and superconducting coil.
A distributed energy storage unit consists of a bank of bat-
teries integrated to the distribution grid by a power electronics
inverter and transformer, as shown in Fig. 1.
The present approach considers electrochemical batteries
for storing energy. The main Rechargable electrochemistries
available today are lead-acid, nickel-cadmium, nickel-metal
hidride, lithium-ion, lithium-polymer and zinc-air. The first
type of battery is more often used due to its reduced cost.
Nickel-cadmium in spite of being a mature technology has
been subject of critics from the environmental point of view.
An inverter is required for controlling the charge and
discharge of the battery and for converting from DC to three-
phase AC. This inverter can also compensate reactive power
and reduce harmonic distortion. These two alternatives are
not studied in this article. A transformer is used for galvanic
isolation and for raising the voltage. Distributed energy storage
 GRID
 
Pb(t)  ≤ Pb(max) (6)
Transformer
where Rk is the resistance of the k-th distribution line, Ik(t)
is the current in the line k at the time t, and Eb(t) is the
energy stored in each DESU. The decision variable Pb(t) is
AC
DC the power delivered by the DESU b in the time t. If this value
is negative then the energy storage unit is charging, otherwise
it is discharging. Ωb represents the set of the DESU installed
in the distribution system while Ωl is the set of branches of
Battery the system.
Let us consider first a reduced problem with only the total
energy constraint (3). There is one of these constraints for
Fig. 1. Detail of a distributed energy storage unit each DESU placed in the system. Therefore, the Lagrangian
function requires one Lagrange multiplier for each DESU as
given in (7):
devices up to 4 MW have been reported [13]. Therefore,
the proposed methodology fully agrees with the technology 24
X X 24
X
available in the market. L= f (t)∆t + λb Pb(t) (7)
There are different models for the DESU. In this case, a 0 b∈Ωb 0
simplified energy model is used. This model will be discussed The optimality conditions are obtained by derivation of L
in detail in the next section. as function of Pb(t) and λb as given in (8) and (9).
III. O PTIMIZATION FOR M INIMAL L OSSES 24  
∂L X ∂f (t)
Let us define f (t) as the total active power loss in a = + λb =0 (8)
∂Pb(t) 0
∂Pb(t)
distribution feeder in the time t. This power loss changes
according to the power Pb(t) injected or extracted by each 24
∂L X
energy storage system. The objective is to minimize the total = Pb(t) = 0 (9)
∂λb 0
energy losses in one day as given in (1). The total energy
supplied or absorbed by each DESU in a complete period Equation (8) implies the optimal operation is achieved if
must be zero as given in (3). This means the load profile the derivative of f respect to Pb is time invariant as given in
is approximately the same every day. This approximation is (10):
valid in some cases, for example in equatorial countries in
which seasons do not affect the power demand. In a more ∂f
λb = − ∀t (10)
general case, the total energy stored at the end of one period ∂Pb(t)
is given by a first stage of long term optimization. On the Therefore, the optimal operation can be determined by an
other hand, the internal model of the battery imposes some algorithm that iteratively approach this condition maintaining
additional constraints related to the power transmission rate constraint (9).
and the state of charge. These constraints are given in 5 and One challenge for this methodology is to calculate the
6. The complete optimization model is as follows: derivative of the transmission losses in Eq (10). It could be
24 calculated from the Jacobian result of the load flow. Neverthe-
less, Newton-Raphson based methods are not convenient for
X
M in f (t) (1)
0
studies in distribution systems due to the low ratio between x
and r. Therefore, a backward/forward sweep-based load flow
subject to is used for the losses calculation [14]. The value of λb(t) in (8)
X is then calculated by numerical differentiation as given in (11).
2
f (t) = Rk Ik(t) (2) A load flow for a small variation of the power Pb(t) + ∆Pb(t)
k is required in order to calculate this derivative. This load flow
24
X is initialized with the voltages for Pb(t) and therefore it only
Pb(t) = 0 (3) requires one or two additional backward/forward iteration.
0
PL (Pb(t) ) − PL (Pb(t) + ∆Pb(t) )
t λb(t) ≈ (11)
X ∆Pb(t)
Eb(t) = Emin + Pb(t) (4)
0 The value of Pb(t) is initialized in such a way that constraint
(3) is met. It is expected that the final optimal operation will
Emin ≤ Eb(t) ≤ Emax (5) charge the DESUs during the first hours in the morning in
 Initialize   
 0, Pb(t)  ≤ Pb(max)
g(Pb ) = P − Pb(t) , Pb(max) > Pb(t) (15)
t = t+1  b(max)
Pb(t) − Pb(max) , Pb(t) < −Pb(max)

Power Flow for Pb(t)

where β is a tunning parameter and g is the penalization
function.
Power Flow IV. E FFECT OF E NERGY S TORAGE IN THE D ISTRIBUTION
Pb(t) + ∆P
P LANNING

Calculate λb(t) = ∂PL Energy losses in the distribution feeder are directly related
∂Pb
to load limits in transmission lines. As energy losses reduce,
maximum currents are also reduced. Therefore, a highly
loaded transmission line can be relieved by placing DESUs
t ≥ 24? Yes Calculate λmean , ∆λ along the primary feeder. Consequently, energy storage units
could have impact on the distribution system planning. New
No Pb = Pb + ∆λ transmission lines may not be required as a consequence of
reshaping the load curve seen from the substation. It should
be noted that energy planning and power planning, although
related, are usually considered independently. Transmission
t = 0 ∆λmax ≤ 
and distribution expansion planning models are usually built
No
using a power approach which does not consider the load curve
Yes but only the maximum power. This approach is suitable for
conventional distribution systems in which the new transmis-
END sion system must be capable of safely transmit power during
hours of peak demand. However, these hours represent less
Fig. 2. Algorithm for optimal scheduling of distributed energy storage units than 10% of the whole operation of the system. By an energy
approach, the distribution planning could be improved. The
proposed algorithm re-arranges the load in such a way that
order to be discharged during the day. Therefore, a possible the peak of one load is not coincident with the other loads
initial condition of power is given by (12). and the whole system is relieved.
 On the other hand, the proposed objective function is
−Pb(max) t ≤ 12 different than the conventional load reshaping model. In that
Pb(t) = (12)
Pb(max) t > 12 model, the total cost of the energy is minimized. That is
suitable from the final user standpoint but not from the
Once λk is determined for each time t, the new value
distribution system operator standpoint, particularly, in some
of Pb(t) is calculated as given in (13) where ψ is a tuning
market schemes where the spot price is unified in the whole
parameter.
transmission system. In general, it is expected that peak load
corresponds to maximum price. However, since the price is
Pb(t) ← Pb(t) + ψλb(t) (13) unified, this peak load is the sum of all load in the system.
Notice Peak load in a particular feeder could happen to be at different
P that constraint (3) is met during all the algorithm time than aggregated demand according to the type of load
since ∆λb(t) = 0. The complete algorithm is shown in Fig
2. (residential, commercial or industrial). Therefore, the market
On the other hand, the power capacity of the DESU is approach gives a different solution than the proposed energy
determined by using this reduced problem since constraints (5) losses approach.
and (6) are not taken into account yet. This information is used V. R ESULTS
for optimal placement of the DESU in the power distribution
system as presented in the results. The proposed algorithm was tested on the IEEE 37-bus test
The inequality constraints can be effortlessly included in the distribution feeder which was modified by adding two DESUs
optimization algorithm by adding a penalization factor in the in nodes 29 and 12 as shown in Fig 3. Parameters of the feeder
objective function. This penalization factor is proportional to for balanced operation are given in Table I for a SBASE =
the difference between the actual power and the violated limit 1000 kW and VBASE = 4.8 kV. The voltage regulator placed
as given in (14) and (15) in the slack node is maintained in 1 p.u. in order to determine
the effect of the DESU on the voltage profile. It is assumed that
f (t) =
X
2
Rk Ik(t) + βg(Pb(t) ) (14) the system has two types of loads: residential and industrial.
k
The load curves corresponding to each of those type of loads
are depicted in Fig 4 where nodes 25 to 34 are industrial loads TABLE I
and the remaining nodes are residential loads. PARAMETERS OF THE IEEE 37 N ODES D ISTRIBUTION F EEDER

Na Nb R X B/2 P Q
1 34 1 2 0.0080 0.0320 0.0000 0.6300 0.3150
tap=1 2 3 0.0060 0.0016 0.0005 0.0000 0.0000
3 4 0.0083 0.0022 0.0007 0.0000 0.0000
36 2 33 32 4 5 0.0111 0.0051 0.0002 0.0850 0.0400
5 6 0.0037 0.0017 0.0001 0.0000 0.0000
6 7 0.0018 0.0362 0.0000 0.0000 0.0000
37 35 3 25 26 29 6 8 0.0111 0.0051 0.0002 0.0850 0.0400
6 9 0.0059 0.0027 0.0001 0.0000 0.0000
DESU2 9 10 0.0082 0.0033 0.0001 0.0420 0.0210
24 22 21 4 27 30 9 11 0.0059 0.0027 0.0001 0.0850 0.0400
11 12 0.0104 0.0048 0.0002 0.0420 0.0210
12 13 0.0118 0.0055 0.0002 0.1400 0.0700
23 5 28 31 13 14 0.0074 0.0034 0.0001 0.1260 0.0620
14 15 0.0074 0.0034 0.0001 0.0000 0.0000
15 16 0.0051 0.0021 0.0001 0.0850 0.0400
15 17 0.0074 0.0034 0.0001 0.0420 0.0210
10 9 6 8 12 18 0.0133 0.0054 0.0001 0.0000 0.0000
18 19 0.0328 0.0134 0.0003 0.0420 0.0210
18 20 0.0051 0.0021 0.0001 0.0850 0.0400
19 11 7 4 21 0.0062 0.0025 0.0001 0.0420 0.0210
21 22 0.0052 0.0024 0.0001 0.0420 0.0210
22 23 0.0051 0.0021 0.0001 0.1260 0.0630
18 12 16 22 24 0.0072 0.0029 0.0001 0.0420 0.0210
3 25 0.0067 0.0031 0.0001 0.0850 0.0400
DESU1 25 26 0.0096 0.0045 0.0002 0.0000 0.0000
20 13 14 15 17 26 27 0.0021 0.0008 0.0000 0.0380 0.0180
27 28 0.0133 0.0054 0.0001 0.0850 0.0400
26 29 0.0148 0.0068 0.0003 0.0850 0.0400
Fig. 3. IEEE37 test distribution feeder with two distributed energy storage 29 30 0.0111 0.0051 0.0002 0.0000 0.0000
units (DESU1 and DESU2) 30 31 0.0072 0.0029 0.0001 0.0420 0.0210
29 32 0.0236 0.0096 0.0002 0.0000 0.0000
The total power losses with and without energy storage are 32 33 0.0031 0.0013 0.0000 0.1610 0.0800
32 34 0.0195 0.0079 0.0002 0.0420 0.0210
shown in Fig 5. The power losses in the distribution system 3 35 0.0103 0.0042 0.0001 0.0000 0.0000
are highly reduced during peak hours while they increase 35 36 0.0062 0.0025 0.0001 0.0850 0.0400
during low demand hours due to the charge of the DESUs. 35 37 0.0082 0.0033 0.0001 0.0930 0.0440
Nevertheless, the total energy loss is decreased by 5.3%.
The reduction in terms of peak power losses is even more 15
Power Losses [%]

significant. It drops from 0.1458 pu to 0.085 pu meaning a

reduction of 41.42%. 10
The power exchanged between each DESU and the distri-
bution grid is depicted in Fig 6. Since DESU1 is placed in a
5
residential zone, its power profile is similar to the load curve
for residential loads. The maximum required power capability
is less than 400 kW which is a value available with the state 0 5 10 15 20 25
Time [h]
of the art of the technology.
Inequality constraints where also considered in the algo- Fig. 5. Total power losses for the operation in one day. ( ) without energy
rithm. The maximum power capability of the DESUs was storage. ( ) with optimal operation of DESUs

0.4
1
0.2
Pb(t) [pu]

0.8
P [pu]

0.6 0

0.4 −0.2
0 5 10 15 20 25 0 5 10 15 20 25
Time [h] Time [h]

Fig. 4. Load curves used for the simulation. ( ) load curve for residential Fig. 6. Battery charging/discharging profile for each DESU. ( ) DESU1.
loads. ( ) load curve for industrial loads. ( ) DESU2
 0.2 11 10 8 5
12 4
13
6
4 14 3
Pb(t) [pu]

17

Loss Reduction [%]

Pmax 15 19
9
16
7
0 20

−Pmax 21
24
2
3 18 25
22
26
28 23
−0.2 34
0 5 10 15 20 25 31
32 29 27
35
30 36
Time [h] 2 33

Fig. 7. Battery chargin/discharging profile for each DESU considering 0.2 0.3 0.4 0.5
inequality constrains. ( ) DESU1. ( ) DESU2 Required Power Capacity [pu]

Fig. 9. Loss reduction for placement of DESU in different nodes

1

0.95
VI. C ONCLUSIONS
V [pu]

0.9 A new algorithm for the optimal scheduling of distributed

0.85
5 10 15 20 25 30
Node
Fig. 8. Voltages profile in t = 20h. ( ) without DESU. (
DESU
limited to 0.2 pu. The battery charging and discharging profile
for this case is shown in Fig 7.
In contradistinction to transmission systems, voltage profile
in distribution systems is dependent on the active power. The
reason behind this behavior is the close relation between r
and x in each distribution line. This effect is depicted in Fig 8
where the voltage profile with and without distributed energy
storage units is presented for t = 20h which is the peak hour.
The maximum reduction in terms of power losses is deter-
mined by using the reduced problem (see Section III-A). In
addition, the required power capacity can be determined by
using the information given by the Lagrange multipliers. Fig
9 shows the total energy reduction in percentage as function
of the required power capacity for placement of one DESU in
different nodes. Energy losses reduction is different according
to the node where the DESU is placed. For example, by
placing a DESU in Node 3 the maximum reduction of energy
losses is 3.8% and requires a capacity of 0.51 pu. Almost the
same reduction can be achieved placing a DESU in Node 14
with a required capacity of 0.31 pu. Nodes too close to slack
bus such as Node 2 or 3 as well as nodes too far as Node 34
are the less efficient for minimal losses.
It should be noted that optimal placement and sizing of
distribution energy storage units could be modelled as a
multi-objective problem with two conflicting criteria, namely:
minimal energy losses and minimum capacity. In the proposed
distribution test system, the Pareto optimal points are given
by the nodes N = {33, 32, 31, 18, 16, 15, 14, 13, 12, 11}. Of
course, if only one DESU is consedered at each bus.
energy storage units from the losses standpoint was proposed.
The algorithm considers the main constraints of this type of
35 devices and permits real time operation if the load curve
is accurately predicted. Simulation results on the IEEE 37
) with nodes test system demonstrate the advantages of the proposed
methodology.
Lagrange multipliers are used as sensitivity factor for deter-
mining the size and optimal placement of distributed energy
storage units.
The problem could be analyzed as a multi-objective opti-
mization with two conflicting objectives: minimum transmis-
sion losses and minimum power capability. The impact of
distributed energy storage units in the expansion planning was
also discussed.
The impact on the distribution system was clearly shown,
and becomes evident that allows a more efficient operation by
reshaping the load curve. If there is massive implementation
of DESUs, it could also impact electricity prices, as well as
investment cost of new equipment to reinforce distribution
systems.
After showing the positive impacts, there should be adjust-
ments in the regulation and policies to stimulate real imple-
mentation of DESUs, which is often one of the difficulties to
make these projects a reality.
By reshaping the load curve when using storage technolo-
gies, conventional generation resources are optimized, leading
to mitigation of CO2 emissions, which is also an issue of great
concern nowadays.
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