  This paper presents a comparative evaluation of central and self-dispatch
management concepts for battery energy storage (BES) facilities in island power
systems with a high renewable energy source (RES) penetration. BES facilities
deployed to support the integration of additional wind capacity can be either
centrally dispatched by the island System Operator or they can be
self-dispatched within a Virtual Power Plant entity comprising renewables and
storage, called a Hybrid Power Station (HPS). To explore the anticipated
benefits of each BES management paradigm, annual simulations are performed for
an example island system, employing a three-layer mixed integer linear
programming (MILP) method to simulate the unit commitment and economic dispatch
processes. The levelized cost of energy (LCOE) of combined BES and renewables
investments is calculated and the achieved RES penetration levels and island
system generation cost are evaluated, allowing the identification of Pareto
optimal storage configurations, leading to lowest LCOE for a given RES
penetration target. Overall, the centrally dispatched BES systems prove to be
substantially more cost-effective, compared to the self-dispatched alternative,
for achieving similar RES penetration levels.
