A Stochastic Simulation of Battery Sizing for
Demand Shifting and
Uninterruptible Power Supply Facility
Chee Wei Tan, Student Member, IEEE, Tim C. Green, Senior Member, IEEE
and Carlos A. Hernandez-Aramburo, Member, IEEE.
Imperial College London,
SW7 2AZ London, United Kingdom.
Abstract - This paper presents a stochastic simulation using Monte
Carlo technique to size a battery to meet dual objectives of
demand shift at peak tariff times and outage protection (an
uninterruptible power supply function) for commercial buildings.
Both functions require battery storage and the sizing of battery
using numerical optimization is popularly used. However, outage
and demand peaks are not of deterministic nature or location. A
given battery size can only offer a particular probability of
surviving an outage or completing a demand shift, this offers an
opportunity to battery sizing using stochastic methods. In this
work, the Monte Carlo method takes into account the historical
outage statistics and building load profiles. Further, it describes
the life-cycle cost of the system and the ratio of saving and
investment for ten cases of demand shifting. It also reports on the
customer outage costs which were calculated based on a weekday
load profile for different outage durations. By considering the
statistics of both problems together, customers can assess the risk
of not being able to survive in an outage and the success rate of
meeting the demand shift capability based on the results of the
proposed method.
I. INTRODUCTION
Due to the cyclical office working hours, many commercial
buildings have very high electricity demand during the
daytime of weekdays. In contrast, during the night time or
weekends, the electric load is low. Referring to Even et al. [1],
considering the peak and off-peak electricity tariff, end users
may prefer to install energy storage devices in order to shift
part of the electrical load from peak hours to off-peak hours to
reduce the total electricity charge. Thus, one may gain a
reward from the difference in tariff and the amount of energy
shifted. A second issue is the unpredicted unavailability of the
utility supply that may cause significant loss to consumers,
such as the lost of high value computer operations. Therefore,
Uninterruptible Power Supply (UPS) systems are seen as
essential in many commercial buildings.
Both demand shift and UPS support require relatively
expensive battery energy storage. Therefore, the sizing of the
battery capacity is crucial in order to meet the objectives and
to optimize the system cost. There have been many techniques
The authors would like to acknowledge Universiti Teknologi Malaysia (UTM)
for the financial sponsorship of Mr. C.W. Tan during his Ph.D. programme at
Imperial College London.
1-4244-0655-2/07/$20.00©2007 IEEE
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reported [2-4] to size battery energy storage systems for
different applications. Generally, these studies were performed
using numerical optimization of deterministic mathematical
models. Deterministic approach has been described in [5] to
optimally sizing the battery energy storage capacity to achieve
maximum economic benefits in a power system. An algorithm
combining multi-pass dynamic programming has been
developed in [6] for economic dispatch and optimal sizing of
battery energy storage. Jung et al. [7] have proposed a method
to determine the optimal capacity of the battery energy storage
system for the purpose of load levelling.
Since the power disturbances are stochastic phenomena, the
sizing of battery storage capacity requires a probabilistic
approach. Further, in any cases where there are some weeks of
load profiles missing randomly over a year, a stochastic
simulation would perform the demand shifting evaluation
more effectively than of using analytical method. Stochastic
simulation is more popularly used in power system reliability
analysis. A technique for evaluating the reliability and the
reliability cost assessment in a composite power system
network using sequential Monte Carlo simulation have been
discussed in [8, 9] respectively. In reference [10], the
economic limitations of wind energy penetration into
electrical power systems have been assessed based on the
Monte Carlo approach. However, the sizing of battery
capacity using a stochastic method has not been extensively
explored. Further, determination of optimal battery size for
both demand shifting and UPS functions may facilitate
meeting combined objectives with single battery.
This paper presents a stochastic simulation to determine a
suitable battery capacity using Monte Carlo simulation. The
requirement is to achieve demand management as well as to
ensure the uninterrupted power supply in commercial
buildings. For a practical case study, the load profiles of a
medium size commercial building and the historical outage
information of a major city in the United Kingdom have been
collected for the analysis. This is important because
consumers can base sizing decisions on the historical data
rather than buying a fixed duration UPS system without
understanding the local outage statistics and how likely an
outage of a particular duration might be. In addition, the
economic aspect includes the life-cycle cost and the ratio of
2607
saving and investment for different level of demand shift TABLE 1
STATISTICAL COMPARISON OF SEASONAL OUTAGE DURATION (MINUTE).
together with the customers’ outage cost are discussed.
CDF Stats.\Season Spring Summer Autumn Winter
II. DATA SOURCES AND ASSUMPTIONS Mean 178.1 208.8 208.8 184.2
Median 108 111 111 102
The following discussion summarizes the parameters and
assumptions used in the stochastic simulation of battery
capacity sizing. The input data for the simulation include the

Interrupted Duration
(Minute)
160
Spring
Spring
Summer
Summer
140 Autumn
Autumn
Winter
Winter
120

100
Figure 4. The duration of interruption as a function of the total affected
80 customers.

60
0 2 4 6 8 10 12 14 16 18 20 22 24 building load profiles and historical outage distribution. The
Time ( Hour ) load profile is for a medium size commercial building, which
(a) was measured at 5 minute intervals. Unfortunately, the
Spring
available load profiles are not a complete set of 365 days load
Summer profile. There are some gaps scattered over the annual data in
Autumn which the building demand was not measured. However, the
Winter
available data are believed to be representative of annual data
because the data consist of more than three quarter of an
annual load profile.
Examples of weekday and weekend load profile for four
seasons are presented in Fig. 1. It is apparent that the weekday
profile has a significant difference between the peak and base
load levels.
The statistics of outage information were obtained from the
(b) database of a distribution network operator of a major city in
Figure 1. Typical (a) weekday and (b) weekend load profiles. the United Kingdom. The information consists of the outage
0.25 events for four years (i.e. from 1997 to 2000). The seasonal
Distribution/Total Outages

cumulative outage distributions as shown in Fig. 2 were used

Cummulative Outage

0.2 as the input parameter to the Monte Carlo simulation. In

0.15 which, the statistics for four seasons are fairly linearly
Spring
distributed over the seasons. This means that the outage
0.1 occurrence has approximately the same probability to happen
Summer
0.05 Autumn in any days over a year. The daily outage occurrence
Winter distribution correlates with the building weekday load profile
0
0 10 20 30 40 50 60 70 80 90 100
as illustrated in Fig. 3. The summary statistics of outage
Day duration for each season are tabulated in Table 1. Fig. 4
Figure 2. Comparison of seasonal outage occurrence distribution normalized illustrates the distribution of the duration interruption as a
to the total number of outages. function of the number of affected customers. Based on this
400 statistic distribution, there are more than 98% of customers
350 affected by less than 8 hours of power interruption in four
300 years. This information is important to commercial customers
because it shows that the duration of interruption in the chosen
Frequency

250
200 city has high a probability of less than 8 hours.
150 In this study, the demand shift operation is based on a pre-
100 defined reference level (DS_ref) which if exceeded, prompts
50 the use of battery energy for peak reduction. As the building
0 average peak demand is in the region of 140 kW, several
0 2 4 6 8
10 12 14 16 18 20 22 24 DS_ref were defined, range from 130 kW to 50 kW with 10
Time (Hour)
kW intervals. For the demand shift operation, the process
Figure 3. Histogram by time of day of outage occurrence across the whole
networks over 4 years (grouped in 5 minutes intervals).

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 140 140

Building Load Profile (kW)

Building Load Profile (kW)
120 DS_ref 120 DS_ref
100 100
80 80
60 60 Outage
40 Outage 40
Demand Shifting Energy Demand Shifting Energy
20 Back-up Energy 20
Back-up Energy
0 0 2 4 6 8 10 12 14 16 18 20 22 24 0
0 2 4 6 8 10 12 14 16 18 20 22 24
Time ( Hour ) Time ( Hour )
(a) (b)
140 140
Building Load Profile (kW)

Building Load Profile (kW)

120 DS_ref 120 DS_ref
100 100
80 80
Outage
60 60
40 40 Outage
Demand Shifting Energy
20 Back-up Energy 20
Back-up Energy
0 0 2 4 6 8 10 12 14 16 18 20 22 24 0
0 2 4 6 8 10 12 14 16 18 20 22 24
Time ( Hour ) Time ( Hour )
(c) (d)
Figure 5. Demand management and UPS concept illustration; weekday: a) outage occurs before demand shifting operation, b) outage and demand shifting occur in
the same region, c) outage occurs after demand shifting operation; weekend: d) no demand shifting.

takes place from 7.00 am until 12.00 midnight which is the The total net present value of a recurring saving over the
peak hour range for this case study. analysis period of M years can be calculated by multiplying
The battery energy storage components costs, technical the annual saving with the present worth factor given by
characteristics and the associated economic factors are
summarized in Table 2. The economic calculation in this study § 1  i ·§¨ 1  i
M · § 1 i ·
is done based on the present worth value. The discount rate Pa ¨ ¸  1¸ ¨  1¸ (2)
and the inflation rate of the UK are used. The annual © 1  d ¹¨© 1  d ¸
¹ © 1  d ¹
operational and management cost is assumed to be 1 % of the
initial battery storage investment. The electricity tariff used where i is the excess inflation rate and d is the discount rate at
for this study is listed in Table 3 which is also the rate that which the value of money would increase if invested.
applies to the chosen commercial customer. For the sizing The concept of demand management incorporating a UPS
analysis, the battery is charged at the night electricity tariff function is illustrated in Fig. 5, in which the analysis is
while demand management is carried out during peak hours. characterized into four scenarios. This includes an outage that
Moreover, the battery storage system also acts as a backup
TABLE 2
power (UPS feature) for the building. [11] BATTERY ENERGY SYSTEM COMPONENT AND ECONOMIC FACTOR.
III. PROBLEM FORMULATION Parameter Unit
Battery energy storage [11]
The optimal battery capacity can be found by maximizing Cost 100 £/kWh
the objective function which can be expressed as Life-cycle 4000 Cycles
Round trip efficiency 80 %
Saving Depth of discharge 80 %
S/I (1) Balance of system
Investment Battery charge controller 0.10 £/W
Power conditioner efficiency 95 %
where Saving refers to the amount of the electricity cost saved Inverter 0.50 £/W
by demand shifting and the cost of interruption saved by Power conditioner efficiency 95 %
Life-cycle 10 years
power disturbance using battery energy while Investment is
Economic factor
the capital cost of battery storage system. It is important to Discount rate 4.75 %
note that the ratio S/I has no intention to serve as the ratio of Inflation rate 2.4 %
return but as a performance parameter to determine the best Annual operational and management cost 1 % of investment
option of battery capacity. The economic calculation is based TABLE 3
on the life-cycle costing [12] where consideration of costs ELECTRICITY TARIFF.
over the entire life-cycle of the battery system is made. Day Rate 6.369 p/kWh
Accordingly, future costs are discounted to present values. Night Rate 3.969 p/kWh
The night rate covers the period between 00:00 to 07:00

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 TABLE 4 V. MONTE CARLO SIMULATION FOR BATTERY SIZING
VOLL AS A FUNCTION OF THE OUTAGE DURATION FOR COMMERCIAL SECTOR.
[16] Monte Carlo simulation was used to investigate the required
VOLL in £/kWh for duration of interruption of energy storage for outages and demand shifting operations. It
1 20 1 4 8 24 was intended to reflect stochastic events based on the building
Minute Minutes Hour Hours Hours Hours demand data and the outage data. The issues are how battery
153.0 29.17 26.63 24.40 24.58 10.41
storage capacity is chosen against statistical objectives.
Instead of having a separate battery for each task, this study
may happen before, after or during the demand shifting aimed to combine the capacity required for both tasks into
operation during a weekday and an outage that may also single battery. The details of the Monte Carlo simulation are
happen during a weekend. If an outage occurs during demand described in the following subsections.
shifting, the required energy is calculated such that the
overlapped area is not repeated. The worst case for the risk of A. Random Event Generation
interrupted power is when an outage occurs immediately after The process of the proposed Monte Carlo simulation for
the battery has been discharged for demand shifting (refer to battery sizing is illustrated in the flow chart as presented in
Fig. 5(c)).
Start
IV. CUSTOMER OUTAGE COST ANALYSIS
Reading Data:
The customer outage costs due to the power supply (Annual)
1. 5 minute interval Building Load Profile
interruption are becoming increasingly important to both 2. Analyzed Historical Outages Information
suppliers and end consumers. There have been extensive
studies [13-15] carried out to evaluate the customer outage Setting the Demand Shifting Threshold:
cost in the event of a power outage. Generally, the worth of a DS_refj

power interruption depends on several factors which include

Seasonal Distribution
the amount of energy curtailed, the duration of the outage, the Season = 1
outage occurrence time and the type of activity and economic
value of the involved activity. An approach using surveys of Generating Random Number Array (U):
customers to estimate the cost associated with power supply (Inverse Transform Method)
1. Random Daily Building load profile
interruptions has been described by Kariuki et al. in [14]. It 2. Random variates of Outage Duration distribution
3. Random variates of Outage Occurrence distribution
was based on the cost of damages or losses that customers
would experience if their supply were interrupted. It was
pointed out that, if the power supply was interrupted, it is most Day Sampling
Ni = 1
likely to result in definite cost elements to non-residential
customers, such as paid stuff unable to continue working, Forming New Data Array:
(Corresponding to randomly generated numbers)
damage of equipment, running cost of standby generation, loss 1. U_Load_ProfileSeason
of sales or production and etc. A further study was carried by 2. U_Outage_DurationSeason
3. U_Outage_OccurrenceSeason
Kirschen et al. in [16] to compute the value of security in
power systems using the Monte Carlo simulation in which Energy Management:
• Outage Backup Energy Calculation
random outages were simulated. These studies show that the Back_Up_Energy (Ni) = Load_Profile (Ni) with respect to U(Outage)
• Demand Shifting Calculation
outage costs can be expressed as a function of load Demand_Shifting_Energy (Ni) = Energy at which the DS_refj is
interruption duration. According to [16], the outage costs can exceeded.
Ni = Ni + 1;
be transformed into ‘Value of Lost Load’ (VOLL), which is
expressed in £/kWh of energy not supplied. The values of No Sample
VOLL for commercial sector as a function of outage duration Ni > N ?

are tabulated in Table 4. However, the study did not consider Yes
Season = Season + 1;
the impact of lost load happen during peak hour and night
time. For most commercial customer, an outage happens in the 4 Seasons No
daytime may bring much more impact or higher VOLL to Done ?
customers than an outage that happens during night time. Yes

Having acknowledged that the VOLL is a subjective Combining Seasonal Data Array:
*Parameter = [ Spring; Summer; Autumn; Winter ];
parameter and due to the insufficient information available (i.e. * Back_Up Energy, Required Load_Levelling Energy
the number of outages happen in a year and the outage
duration for each customer), the data in Table 4 are used as a No All DS_refi
reference to perform the evaluation of the proposed method. It Done ?
Yes
is apparent that power supply interruption causes significant
Return
amount of monetary loss to the commercial sector. The longer
the outage duration, the higher the cost. [16] Figure 6. Flow chart of Monte Carlo simulation for the sizing of battery
storage.

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Fig. 6. The process starts by reading the input data, in which
include the load profiles, the cumulative function of outage
occurrence over a year, the cumulative function of outage
occurrence by time of day and the cumulative distribution
function of outage duration. For each simulation, one DS_ref
was defined to evaluate the energy required for shifting the
peak demand.
In order to simulate stochastic events, a set of random
numbers was generated for each season, for the outage
duration and the time of outage occurrence distributions.
These uniform random numbers were then converted into
random variates using Inverse Transform method [17]. In this
method, the uniform random numbers for each input data were
mapped accordingly to follow the probability of the historical
statistics by referring to the cumulative distribution function of
outage duration, outage occurrence day and time of day of
outage occurrence, respectively. Similarly, the available load
profiles were divided into four seasons and in each season, a
set of random number was generated to map the load profiles.
Therefore, for each sample Ni (i.e., one day), a selected load
profile was matched with a random outage event consisting of
random choice of the outage duration and the outage
occurrence time. The simulation was performed for the entire
selected day. The required backup energy was calculated from
the power that was not supplied to the building demand within
the period of the outage. Any simulation points of the load
profile that fell within the period of demand shift operation
were taken into account for the calculation of the required
energy. If the outage duration was longer than a day or started
late in a day and lasted into the following days, only the
energy required for the demand shift in the sample day was
considered but the backup energy was computed until the last
point of the outage duration. The process was repeated for N
samples. After completing the stochastic simulation for all
four seasons, the seasonal energy required for backup and
demand shifting operations were then combined to form an
annual data. The whole process was repeated for different
levels of DS_ref.
B. Stopping Criterion
Fig. 7 shows an example of Monte Carlo simulation
convergence, in which the examined parameter is the required
backup energy as a function of the number of samples. It is
shown that the simulated results fluctuate at a low number of
samples (below 10,000 samples) and converge as the number
of samples increase. The average value shown is the mean of
900
800
Back-up Energy
700 Average Value
Deviation Error
600
500
0 1 2 3 4 5 6 7 8 9
x 10
Figure 7. Convergence of Monte Carlo simulation.
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all simulations above 10,000 samples. There is no guarantee
that more samples will lead to more accurate answer but there
is a penalty in computational time. Based on the graph, a value
of 20,000 samples was selected in a reasonable steady-state
region for this study with a deviation error that is almost
negligible.
C. Simulation Output
The output of the Monte Carlo simulation includes the
amount of energy required in the successful events of
surviving outages (for UPS function) and the energy required
in the successful events for demand shifting within the peak
tariff times.
VI. RESULTS AND DISCUSSIONS
The results of Monte Carlo simulation and the economic
viability of the system are discussed in the following two
subsections.
A. Sizing of Battery Capacity
The cumulative probability of sustaining supply through an
interruption as a function of battery capacity is shown in Fig. 8.
Based on the plot, consumers can decide the desired capacity
of battery depending on individual requirements. For instance,
to survive 90% and 95% of power interruptions, one requires
823 and 1173 kWh of battery energy respectively. The higher
the percentage of avoided interruptions, the larger the battery
size and consequently the higher the system cost. Thus, the
customer always faces the trade off between reasonable
percentage of risk for uncovered outage duration and the cost
of battery investment.
The cumulative successful rate of demand shifting to a
given threshold (DS_ref) is shown in Fig. 9 as a function of
battery capacity. A capacity can be chosen to achieve a certain
success rate.
The total battery capacity is the combination of both the
energy required for backup and demand shifting operations,
which can be calculated as follows:
( E DS / DOD )  E Backup
Battery Capacity (3)
K roundtrip
where EDS is the required demand shifting energy, EBackup is
the required energy for outage, DOD is the depth of discharge
of the battery and Șroundtrip is the round-trip efficiency. The
advantage of this strategy is, by integrating the dual objectives
16
Normalized Interruption
14
12
Avoidance
10
8
6
4
2
0
10
4
Figure 8. The cumulative probability of sustaining supply through an
interruption as a function of battery capacity.
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 1.0 TABLE 5
CUSTOMER OUTAGE COST AS A FUNCTION OF THE OUTAGE DURATION.
0.9 Time 1 20 1 4 8 24
Minute Minutes Hour Hours Hours Hours
Number of Successful Events/

0.8
Cost (£) 288 1098 3007 11020 22202 28209
Total Number of Events

0.7
DS_ref
5
0.6 No DS x 10
130 kW 8.6
0.5
120 kW 8.4
0.4 110 kW
100 kW 8.2
0.3 90 kW 8 40 %
80 kW

Life-Cycle Cost (£)

0.2 50 %
70 kW 7.8
0.1 60 kW 60 %
7.6 70 %
50 kW
0 7.4 80 %
0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8
Battery Capacity (MWh) 85 %
7.2 90 %
Figure 9. The Cumulative probability of successful demand shifting as a
function of battery capacity and demand shift threshold. 7 95 %

6.8
of demand shifting and UPS function into a single battery, if a
long duration outage occurs on days with less demand shift 6.6
operation, the portion of storage provided for demand shifting 6.4
No DS 130 120 110 100 90 80 70 60 50
energy (EDS) can be used to support the load for a longer
Load Levelling Reference Level LL (kW)
duration than expected. Figure 10. The Life-cycle cost of the system as a function of demand shift
threshold and demand shift success rate.
B. Sizing Component Economics
For the cost calculation, it was assumed that the cost of 0.7
charging the battery for UPS function is negligible as
Ratio of Off-Peak Energy/
Total Energy Consumed

compared to entire life-cycle cost. The required backup energy
was arbitrary chosen to survive 90% of outages. Fig. 10
presents the life-cycle cost for the entire system consisting of
demand shift and UPS facilities, as a function of the DS_ref
level. Seven levels of cumulative probability of successful
demand shifting are shown. In general, the life-cycle cost of
the system increases as the DS_ref level decreases and the
higher the success rate required for demand shifting, the
higher the life-cycle cost. This is because, with the current
battery cost, the per kWh cost of battery energy generated for
demand shifting is higher than the peak hour electricity tariff
that used in this study. Therefore, the more energy being
shifted by battery, the higher the life-cycle cost as compared
to the case of no demand shift (No DS). Fig. 11 shows the
ratio of the purchased annual off-peak energy at night
electricity tariff to the total annual energy consumption. It
shows that, for DS_ref of 70 kW and below, the amount of
energy shifted is more than the off-peak energy consumed for
the case of no demand shift.
In general, not all the commercial customers may suffer a
significant amount of lost load at anytime of a day. For
instance, a typical customer would have a much higher value
of VOLL if outages occur during the office hours but may
have negligible impact to the customer if outages happen at
night time as there may be no activity being carried out. The
data in Table 4 were used to estimate the cost to a customer
being unable to cover an interruption by using an example of a
winter weekday load profile (shown in Fig. 1(a)), in which the
average customer outage costs are tabulated in Table 5 as a
function of outage duration. These outage costs are used as a
0.6
0.5
0.4
0.3
0.2
0.1
0
No DS 130 120 110 100 90 80 70 60 50
Demand Shifting Threshold, DS_ref (kW)
Figure 11. The ratio of annual off peak energy and total annual energy
consumption.
reference in this study which may not be applicable to all
commercial customers.
Fig. 12 shows the net present value of savings made from
demand shifting (with no outage savings) calculated for ten
years using net present value and the capital costs of battery
storage system. In term of investment cost, the larger the size
of battery, the higher the cost of the battery system. It can be
observed that the savings are diverging from No DS to DS_ref
level of 80 kW and converging to a maximum saving from 80
kW to 50 kW of DS_ref level. This is because the suggested
battery capacities from the Monte Carlo simulation for the
high success rate of demand shift are slightly larger for this
particular year of load profile used. Based of Fig. 12,
customers can decide the economic viability of the investment
by estimating the outage costs. If the net present value of the
customer outage costs over ten years is larger than the
difference between the savings (with no outage costs) and the
capital investment, it is worth for the customer to invest in

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 x 10
5 The integration of both demand shifting capability and UPS
4.5 function helps to facility the dual objective in a single battery.
40 % The factor that determines the worth of the investment of the
4 50 %
60 %
integrated system is mainly governed by the economic cost
3.5 70 % that a power interruption may bring to a particular customer.
80 % The method presented in this paper allows the commercial
3 85 % sector customers to accurately assess the risk of not being able
90 % to cover the full duration of an outage as a function of the UPS
2.5
Cost (£)

95 %
battery capacity and its demand shifting target.
2
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distribution and the building load variation have been Springer-Verlag, 1996.
analyzed and used as the input parameters to the simulation.

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