Cloud Energy Storage for Residential and Small Commercial Consumers: A Business Case Study

Significance Statement

Both industry and academia have with time come to recognize the significance and potential of energy storage as a prospective resource that can help create a balance between generation and load in power systems. Presently, the world is migrating towards renewable resources with variable renewable energy sources such as wind and photovoltaics. Maintaining the stability of a power system requires real-time balancing of the energy that is consumed and produced. Recent trends are focusing on utilizing distributed energy storage systems by both small residential and commercial users so as to integrate variable renewable energy and reduce electricity bill. Cost, policy, and control efficiency limit the profitability of distributed energy systems and hinders the incentive of both small residential and commercial consumers to purchase the distributed energy storage systems. Among recent power grid and internet technological advances, resource sharing make possible a better utilization of distributed energy systems resources.

Tsinghua University and University of Washington researchers developed a novel way of using energy storage – cloud energy storage – a grid-based storage service that enables ubiquitous and on-demand access to a shared pool of grid-scale energy storage resources. The team aimed at describing how this state of the art technology would be realized and how it is capable of providing energy storage services at substantially lower cost. They also described the cloud energy storage enabling technique that supports both the needs of residential distributed energy systems and the optimal operation of storage resources. Their research work is now published in Applied Energy.

Chongqing Kang and colleagues commenced by conducting empirical works where by, firstly, they proposed the concept of cloud energy storage which utilized central energy storage facilities to provide distributed storage services to residential and small commercial users. They then developed and described the architecture, enabling technologies and operation mechanisms that would facilitate the cloud energy storage. The team then designed the business model of cloud energy storage and demonstrated its profitability using real life residential load and electricity data.

The authors observed that cloud energy storage users can use their cloud batteries just like real energy storage devices. Based on the case study on actual residence load data and electricity price, the team noted that social benefits including, the minimal influence on the percentages of social welfare improved by cloud energy storage due to lower unit price as a result of energy storage. In totality, it was seen that cloud energy storage was more economical than distributed energy systems since the economies of scale has a significant influence on the economy of cloud energy storage.

Chongqing Kang and colleagues successfully described novel concept-cloud energy storage. This new service has the potential to provide the same services as the presently used distributed energy system does, but now at a lower social cost. Its future is so great in that it has the potential to, one day, gather fragments of energy storage resources such as electric vehicles, uninterrupted power supplies and residential distributed batteries. More so, the cloud energy storage business model can presently be merged into some current business models as value-added services.

Cloud Energy Storage for Residential and Small Commercial Consumers-Renewable Energy Global Innovations

About The Author

Jingkun Liu is currently a public official in the government of Shuyang Town, Xianghe County, Hebei Province, China. He received his Bachelor’s degrees of Electrical Engineering and Economics from Tsinghua University in 2012 and Peking University in 2013, respectively. He received his Ph.D of Electrical Engineering from Tsinghua University in 2017. He was a visiting student in the University of Washington, Seattle from Sep. 2015 to Sep. 2016.

 His research interests focus on energy storage in power system and power system reliability.

About The Author

Ning Zhang is an associate professor in the Department of Electrical Engineering, Tsinghua University. He got his B.Sc. degree from Tsinghua University, Beijing, China in 2007. He got his Ph.D in electrical engineering with Excellent Doctoral Thesis Award and Excellent Graduate Student Award from Tsinghua University in 2012. After he completed two-year research as a post doctor, he started working in Tsinghua University as a Lecturer in 2014. He was a research associate in The University of Manchester from Oct. 2010 to Jul. 2011 and a research assistant in Harvard University from Dec. 2013 to Mar 2014. He was awarded Yong Elite Scientists Sponsorship Program by Chinese Association of Science and Technology in 2016. His paper is awarded one hundred most influential papers and top articles in outstanding S&T journal of China.

 His research interests include multiple energy system, power system planning and operation with renewable energy (wind power photovoltaic, concentrated solar power).

About The Author

Chongqing Kang is a full professor and the Chairman of Executive Committee of Department of Electrical Engineering. He holds Bachelor’s degrees of both Electrical Power Engineering and Environmental Engineering in 1993, and a Ph.D in Electrical Power Engineering from Tsinghua University in 1997. He has been appointed Professor of Electrical Engineering Department of Tsinghua University since 2005. From 2011 to 2014 he was the Director of Centre for Teaching Excellence, Tsinghua Univ.

He is the recipient of the National Science Fund for Distinguished Young Scholars. He is Fellow of IEEE and IET. He is the senior member of CSEE. He has been on the editorial board of 5 international journals including IEEE Transactions on Power Systems and Electric Power Systems Research and 6 Chinese journals indexed by EI. He won the second prize of National Teaching Achievement Award in 2014. He and his team was granted the Institute Prize in Global Energy Forecasting Competition in 2014. He was granted one gold award and one silver award in the 44th International Exhibition of Inventions in Geneva in 2016.

 His research interests include power system planning, power system operation, renewable energy, low carbon electricity technology, load forecasting and electric market.

About The Author

Daniel S. Kirschen was appointed Close Professor of Electrical Engineering, University of Washington in 2011. From 1994 to 2010, he was Professor of Electrical Energy Systems and Head of the Electrical Energy and Power Systems research group at the University of Manchester in the UK. Prior to joining the academic world, he worked for Control Data Corporation and Siemens-Empros on the development of advanced application software for electric utilities.

His research interests include Integration of renewable energy sources in the grid, power system operation, power system economics, and resilience of the grid to natural disasters.

About The Author

Qing Xia is now a professor at Tsinghua University, Beijing, China. He received his Ph.D. degree from the Department of Electrical Engineering at Tsinghua University in 1989.

 His research interests are mainly power economics, power markets, power system expansion planning, power system reliability, power system load forecasting, and smart grids.


Jingkun Liu, Ning Zhang, Chongqing Kang, Daniel Kirschen, Qing Xia. Cloud energy storage for residential and small commercial consumers: A business case study. Applied Energy volume 188 (2017) pages 226–236

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