Impact of Energy Storage on Market-Based Generation Investment Planning

Abstract

Previous work has analyzed the role of energy storage (ES) on generation investment planning through centralised cost-minimization models which are inherited from the era of regulated electricity utilities. This paper investigates this issue in the context of the deregulated market environment by proposing a new strategic generation investment planning model. The decision making of a strategic generation company is modeled through a multi-period bi-level optimization problem, where the upper level determines the profit-maximizing investment decisions of the generation company and the lower level represents the market clearing process, accounting for the timecoupling operational characteristics of ES. This bi-level problem is solved after converting it to a single-level mixed-integer linear problem (MILP). Case studies demonstrate that the introduction of ES reduces the total generation capacity investment and enhances investments in "must-run" baseload generation over flexible peaking generation, yielding significant system cost savings.

The role and value of inter-seasonal grid-scale energy storage in net zero electricity systems

“…Seasonal energy storage may be of interest in countries where the operation of low-carbon dispatchable power may be limited, or the potential of iRES is particularly high. Importantly, the deployment of energy storage capacity in electricity systems impacts investment and market decisions for generation capacity (Borozan et al, 2019;De Sisternes et al, 2016;Guerra et al, 2020;Oderinwale et al, 2019), emphasising the need for detailed study in this area.…”