Financial assessment of battery energy storage systems for frequency regulation service

Avendaño-Mora, M.; Camm, E.H.

doi:10.1109/pesgm.2015.7286504

Cited by 22 publications

(14 citation statements)

References 3 publications

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“…Avendano-Mora and Camm (2015) discussed performance score-based payment for regulation services in PJM and showed AE3% variation can result in a change of AE$3 million in project net present value (NPV) for 50 MW of energy storage capacity. 37 This study also found storage replacement cost as another important assumption that could potentially impact benefit estimation -each additional replacement cost can reduce the NPV by 20%. A summary of the literature covering regulation service benefits is provided in Table 5 below.…”

Section: Regulationmentioning

confidence: 66%

“…Sayer et al (2007) analysed the Eastern New York market data and found a $2/MW h reserve price when storage was used for other more valuable applications. 15 Based on an assumption of $30/MW h variable O&M cost and 3000 hours of annual service Table 5 Literature review summary on regulation [10][11][12]14,15,17,[19][20][21][22][23][24][25][29][30][31]37,40,41,46,47 hours, a net benefit of $36/kW-year was estimated. Using CAISO data, Eyer and Corey (2010) estimated a reserve price of $20/kW-year, which is an average of a low-end estimation of $7.9/kW-year with $3/MW h of reserve price while providing services for 30% of the hours in a year and a high-end estimation of $31.5/kW-year with $6/MW h of reserve price and providing services for 60% of the hours in a year.…”

Section: Spinning/non-spinning Reservementioning

confidence: 99%

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Assigning value to energy storage systems at multiple points in an electrical grid

Balducci

Alam

Hardy

et al. 2018

Energy Environ. Sci.

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This article presents a taxonomy for assigning benefits to the services provided by energy storage systems (ESSs), defines approaches for monetizing the value associated with these services, assigns values to major ESS applications by region based on a review of an extensive set of literature, and summarizes and evaluates the capabilities of several tools currently used to estimate value for specific ESS deployments.

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Section: Regulationmentioning

confidence: 66%

Section: Spinning/non-spinning Reservementioning

confidence: 99%

Assigning value to energy storage systems at multiple points in an electrical grid

Balducci

Alam

Hardy

et al. 2018

Energy Environ. Sci.

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“…Among the various dynamic analysis methods, the net present value method is widely used because of its simple calculation and intuitive results. The amount of income and expenses during the ESD life cycle are converted into the algebraic sum of the initial values of the project, which can be expressed as [21]:…”

Section: Cost-benefit Analysis Indexesmentioning

confidence: 99%

Cost–Benefit Analysis of Energy Storage in Distribution Networks

Hou

Kou

et al. 2019

Energies

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Due to the challenges posed to power systems because of the variability and uncertainty in clean energy, the integration of energy storage devices (ESD) has provided a rigorous approach to improve network stability in recent years. Moreover, with the rapid development of the electricity market, an ESD operation strategy, which can maximize the benefits of ESD owners as well as the contribution to the electricity network stability, plays an important role in the marketization of ESDs. Although the benefits for ESD owners are discussed in many studies, the economic impact of ESD operation on distribution networks has not been commendably taken into account. Therefore, a cost-benefit analysis method of ESD which quantifies the economic impact of ESD operation on distribution networks is proposed in this paper. Considering the time-of-use (TOU) price and load demand, the arbitrage of ESD is realized through a strategy with low price charging and high price discharging. Then, the auxiliary service of ESD is realized by its capability of peak shaving and valley filling. In this paper, the long-run incremental cost (LRIC) method is adopted to calculate the network price based on the congestion cost. Based on the dynamic cost-benefit analysis method, the cost-benefit marginal analysis model in the ESD life cycle is proposed through the calculation of the present value of benefit. Subsequently, the optimal ESD capacity and charge/discharge rate is obtained to get the shortest payback period by analyzing different operation parameters. Finally, a case study is undertaken, where the ESD operation model mentioned above is simulated on a two-bus system and a 33-bus system, and the ESD cost-benefit analysis and the analysis of corresponding influence factors are carried out adequately.Energies 2019, 12, 3363 2 of 23 significantly. Hence, it is important to put forward an appropriate cost-benefit method of ESDs in distribution networks.Moreover, the electricity market reform has been carried out gradually around the world, and the pilot work of an incremental distribution network is on its way [2]. The incremental distribution network encourages multiple subjects, such as grid companies or individual users, to invest jointly, thus, there is no longer a single form of monopoly for system planning and construction. The permeability of clean energy, such as solar energy, wind energy, tidal energy, nuclear energy, and geothermal energy is increasing rapidly, and the number of ESD users in local power networks is also increasing year by year. Under the background described above, the power supply, network, and load construction are presented as a new mode of investment opening. Therefore, it is more practical to discuss the investment benefits of ESDs in the network under the mode.The motivation and incitement of this paper were discussed above.To keep abreast of current information and development in the field of ESDs, the literature reviews are introduced as follows.There are several relevant studies on the charge and discharge ra...

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“…The feasibility and profitability of microgrids participating in the primary frequency control reserve (FCR) market through an aggregator were assessed in [7]. Furthermore, battery energy storage system (BESS) usage on the frequency regulation market was analyzed in [8].According to [9], underground cabling of the network is an effective way for distribution system operators (DSOs) to increase the reliability of power supply. However, underground cabling is expensive.Today, farming is highly automated and electricity-dependent [10], and even short power interruptions are very detrimental.…”

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confidence: 99%

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confidence: 99%

Microgrid as a Cost-Effective Alternative to Rural Network Underground Cabling for Adequate Reliability

2018

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Microgrids can be used for securing the supply of power during network outages. Underground cabling of distribution networks is another effective but conventional and expensive alternative to enhance the reliability of the power supply. This paper first presents an analysis method for the determination of microgrid power supply adequacy during islanded operation and, second, presents a comparison method for the overall cost calculation of microgrids versus underground cabling. The microgrid power adequacy during a rather long network outage is required in order to indicate high level of reliability of the supply. The overall cost calculation considers the economic benefits and costs incurred, combined for both the distribution network company and the consumer. Whereas the microgrid setup determines the islanded-operation power adequacy and thus the reliability of the supply, the economic feasibility results from the normal operations and services. The methods are illustrated by two typical, and even critical, case studies in rural distribution networks: an electric-heated detached house and a dairy farm. These case studies show that even in the case of a single consumer, a microgrid option could be more economical than network renovation by underground cabling of a branch in order to increase the reliability.The profitability possibilities of residential microgrids as an aggregator-based solution to the perspective of different stakeholders, for example, utilities, aggregators, and prosumers, were analyzed in [6]. The feasibility and profitability of microgrids participating in the primary frequency control reserve (FCR) market through an aggregator were assessed in [7]. Furthermore, battery energy storage system (BESS) usage on the frequency regulation market was analyzed in [8].According to [9], underground cabling of the network is an effective way for distribution system operators (DSOs) to increase the reliability of power supply. However, underground cabling is expensive.Today, farming is highly automated and electricity-dependent [10], and even short power interruptions are very detrimental. Farming is an energy-intensive industry [11], and thus farmers value the reliability of the electricity supply more so than most of the other customer groups.Farms are located naturally in rural areas, possibly on the long distribution network radial branches with low electricity customer density. The majority of farmers have backup generators (e.g., [11]). Farmers having their own power production to cover a portion of their electricity need is gaining popularity.Several recent studies have focused on microgrid islanded-mode operation, microgrid energy management systems, and power supply adequacy and forecasting (e.g., [12][13][14]). The power supply capability in islanded-mode operation was assessed in [12] over a few hours by using a simulation maximum time step of 1 min. Electro-technical aspects of an unexpected microgrid islanded operation were also analyzed in [14] while considering optimal energy management of...

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Financial assessment of battery energy storage systems for frequency regulation service

Cited by 22 publications

References 3 publications

Assigning value to energy storage systems at multiple points in an electrical grid

Assigning value to energy storage systems at multiple points in an electrical grid

Cost–Benefit Analysis of Energy Storage in Distribution Networks

Microgrid as a Cost-Effective Alternative to Rural Network Underground Cabling for Adequate Reliability

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