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Energy storage can be used for many applications in the Smart Grid such asenergy arbitrage, peak demand shaving, power factor correction, energy backupto name a few, and can play a major role at increasing the capacity of powernetworks to host renewable energy sources. Often, storage control algorithmswill need to be \textit{tailored} according to power networks billingstructure, reliability restrictions, and other local power networks norms. Inthis paper we explore residential energy storage applications in Uruguay, oneof the global leaders in renewable energies, where new low-voltage consumercontracts were recently introduced. Based on these billing mechanisms, we focuson energy arbitrage and reactive energy compensation with the aim of minimizingthe cost of consumption of an end-user. Given that in the new contacts thebuying and selling price of electricity are equal and that reactive powercompensation is primarily governed by the installed converter, the storageoperation is not sensitive to parameter uncertainties and, therefore, nolookahead is required for decision making. A threshold-based\textit{hierarchical} controller is proposed which decides on the optimalactive energy for arbitrage and uses the remaining converter capacity forreactive power compensation, which is shown to increase end-user profit.Numerical results indicate that storage could be profitable, even consideringbattery degradation, under some but not all of the studied contracts. For thecases in which it is not, we propose the best-suited contract. Resultspresented here can be naturally applied whenever the tariff structure satisfiesthe hypothesis considered in this work.

Energy storage applications for low voltage consumers in Uruguay