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Variable renewable energy (VRE) generation changes the shape of residual demand curves, contributing to the high operating costs of conventional generators. Moreover, the variable characteristics of VRE cause a mismatch between electricity demand and power generation, resulting in a greater expected energy not supplied (EENS) value. EENS involves an expected outage cost, which is one of the important components of power-generation costs. A utility-scale battery energy storage system (BESS) is popularly used to provide ancillary services to mitigate the VRE impact. The general BESS ancillary-service applications are as a spinning reserve, for regulation, and for ramping. A method to determine optimal sizing and the optimal daily-operation schedule of a grid-scale BESS (to compensate for the negative impacts of VRE in terms of operating costs, power-generation-reliability constraints, avoided expected-outage costs, and the installation cost of the BESS) is proposed in this paper. Moreover, the optimal BESS application at a specific time during the day can be selected. The method is based on a multiple-BESS-applications unit-commitment problem (MB-UC), which is solved by mixed-integer programming (MIP). The results show a different period for a BESS to operate at its best value in each application, and more benefits are found when operating the BESS in multiple applications.

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