Pricing-based energy storage sharing and virtual capacity allocation

This paper develops a novel business model to enable virtual storage sharing among a group of users. Specifically, an aggregator owns a central physical storage unit and virtualizes the physical storage into separable virtual storage capacities that can be sold to users. Each user purchases the virtual storage capacity, and schedules the charge and discharge of the virtual storage to reduce his peak power consumption. We formulate the interaction between the aggregator and users in each operation horizon as a two-stage problem. At the beginning of the operation horizon, the aggregator first determines the unit price of virtual storage capacity to maximize her profit in Stage 1, and users decide the capacities to purchase and the storage scheduling during the operation horizon in Stage 2. Since the closed-form solution is not available and the decisions are coupled across the two stages, we characterize the solutions of the two-stage problem based on parametric linear programming. Simulation results show that compared to the case where each user acquires his own physical storage, storage virtualization reduces the overall physical capacity needed for all users by 34.9%, and the overall physical power rating by 45.1%.