  Energy storage can be used for many applications in the Smart Grid such as
energy arbitrage, peak demand shaving, power factor correction, energy backup
to name a few, and can play a major role at increasing the capacity of power
networks to host renewable energy sources. Often, storage control algorithms
will need to be \textit{tailored} according to power networks billing
structure, reliability restrictions, and other local power networks norms. In
this paper we explore residential energy storage applications in Uruguay, one
of the global leaders in renewable energies, where new low-voltage consumer
contracts were recently introduced. Based on these billing mechanisms, we focus
on energy arbitrage and reactive energy compensation with the aim of minimizing
the cost of consumption of an end-user. Given that in the new contacts the
buying and selling price of electricity are equal and that reactive power
compensation is primarily governed by the installed converter, the storage
operation is not sensitive to parameter uncertainties and, therefore, no
lookahead is required for decision making. A threshold-based
\textit{hierarchical} controller is proposed which decides on the optimal
active energy for arbitrage and uses the remaining converter capacity for
reactive power compensation, which is shown to increase end-user profit.
Numerical results indicate that storage could be profitable, even considering
battery degradation, under some but not all of the studied contracts. For the
cases in which it is not, we propose the best-suited contract. Results
presented here can be naturally applied whenever the tariff structure satisfies
the hypothesis considered in this work.
