Residential Energy Arbitrage Considering Demand Response and Accurate Battery Model with Degradation Cost

In this paper, we study a residential energy arbitrage problem with consideration of the user’s demand response or energy consumption behavior. In addition, the energy arbitrage is analyzed using a novel accurate battery model with degradation cost incorporated. Compared with grid-scale battery energy storage system applications, the residential customer is usually very sensitive to any different pricing signal minutiae, including both electricity price and the demand response incentives. The customer should carefully balance the economic gain from energy arbitrage opportunities and the battery degradation cost, meanwhile considering the load flexibility from ordinary daily life. Through some experimental analysis, it is believed that the residential customer can also benefit from the optimal operation of the household facilities, as the same as the large-scale grid-level battery energy storage system applications.