Increasing wind turbines (WT) penetration and low carbon demand can potentially lead to two different flow peaks, generation and load, within distribution networks. This will not only constrain WT penetration but also pose serious threats to network reliability. This paper proposes energy storage (ES) to reduce system congestion cost caused by the two peaks by sending cost-reflective economic signals to affect ES operation in responding to network conditions. Firstly, a new charging and discharging (C/D) strategy based on Binary Search Method is designed for ES, which responds to system congestion cost over time. Then, a novel pricing method, based on Location Marginal Pricing, is designed for ES. The pricing model is derived by evaluating ES impact on the network power flows and congestion from the loss and congestion components in Location Marginal Pricing. The impact is then converted into an hourly economic signal to reflect ES operation. The proposed ES C/D strategy and pricing methods are validated on a real local Grid Supply Point area. Results show that the proposed Location Marginal Pricing-based pricing is efficient to capture the feature of ES and provide signals for affecting its operation. This work can further increase network flexibility and the capability of networks to accommodate increasing WT penetration.
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