## 4 Simulation and Discussion
### Simulation Results of Energy Storage Participating in Demand Management  
**Optimization results. ** The results of energy storage batteries' configuration and economic evaluation indexes are shown in Table 4. Figure 1 illustrates each cost and income term for demand management with four different energy storage batteries. According to the results, user can make a fortune with four energy storage batteries for providing demand management service. By analyzing the income items from Figure 1 it can be seen that more than 80% of the revenue comes from the auxiliary service revenue. Comparing the values of NPV, PI and IRR, VRLA is recommended to user for the highest return. \begin{table}
\begin{tabular}{c c c c} \hline \hline
**Type of Battery** & \(c_{e}\) **(V/kWh)** & \(c_{p}\) **(V/kW)** & **Efficiency** & **Lifespan (Year)** \\ \hline VRLA & 1240 & 31 & 0.75 & 5 \\ NAS & 2790 & 124 & 0.7 & 15 \\ LFP & 3224 & 155 & 0.85 & 10 \\ V-redox & 3720 & 124 & 0.7 & 10 \\ \hline \hline \end{tabular}
\end{table} 
Table 1: Parameter of batter energy storage. VRLA: Valve regulated lead acid, LFP: LiFePO4, V-redox: Vanadium Redox. \begin{table}
\begin{tabular}{c c} \hline \hline
**Parameters** & **Values** \\ \hline _ir_ (\%) & 1.5 \\ _id_ (\%) & 9 \\ _Cintov_ (\%/kW) & 100,000 \\ _m\({}_{e}\)_ (\(\%\)/kWh) & 0.03 \\ _m\({}_{ls}\)_ (\(\%\)/kWh) & 0.05 \\ _m\({}_{dr}\)_ (\(\%\)/kWh) & 5 \\ \hline \hline \end{tabular}
\end{table} 
Table 4: Energy storage configuration and economic evaluation results of demand management. NPV: net present value; IRR: internal return rate; PI: profit index \begin{table}
\begin{tabular}{c c c} \hline \hline
**Lossed Period** & **Hour (h)** & **Electricity Price (\%/kWh)** \\ \hline Peak period & 8:00–12:00, 17:00–21:00 & 1.0902 \\ Valley period & 0:00–8:00 & 0.318 \\ Flat period & 12:00–17:00, 21:00–24:00 & 0.6451 \\ \hline \hline \end{tabular}
\end{table} 
Table 2: Time of use electricity prices. \begin{table}
\begin{tabular}{c c} \hline \hline
**Parameters** & **Values** \\ \hline _ir_ (\%) & 1.5 \\ _id_ (\%) & 9 \\ _Cintov_ (\%/kW) & 100,000 \\ _m\({}_{e}\)_ (\(\%\)/kWh) & 0.03 \\ _m\({}_{ls}\)_ (\(\%\)/kWh) & 0.05 \\ _m\({}_{dr}\)_ (\(\%\)/kWh) & 5 \\ \hline \hline \end{tabular}
\end{table} 
Table 3: Economic rated parameters. **Energy Storage Charging and Discharging Results. ** Under the best battery selection, the user load power is shown in Figure 2. The charge and discharge power of VRLA is shown in Figure 3. The battery discharges in the peak period to cut down the maximum demand power for more revenue. Meanwhile, attracted by the electricity price difference, the battery charges in the valley period and flat period. Figure 1: Each cost and income term of demand management with four different energy storage batteries. VRLA: valve regulated lead acid, NAS, LFP: LiFePO4, V-redox: Vanadium Redox. Figure 2: User load power with VRLA (Demand management). **Simulation result verification. ** To verify the optimization configuration results of VRLA, the NPV of this service in whole-life-cycle period with the change of energy storage power is illustrated in Figure 4. Net income of users increases in the beginning and then decreases with the increase of energy storage. This trend results from the fact that the growth rate of revenue is not enough to offset the growth rate of energy storage cost after the energy storage increases to a certain capacity. Under this trend, optimal capacity is exited. From Figure 4, it is seen that the user's revenue reaches the highest when the energy storage power is 672.29 kV, which also verifies the simulation result. **Actual energy storage configuration. ** In actual energy storage construction, the optimization results should be approximated calculated based on the actual battery capacity. According to the simulation results, the optimal capacity of VRLA battery is 1344.58 (kWh). The basic cell parameters are 2 V/1000 Ah, so the single battery capacity is 2 (kWh). Then, the number of cells required for the battery is 672.29 (1344.58 kWh/2 kWh).