Option value of dynamic line rating and storage

Quantification of the Energy Storage Contribution to Security of Supply through the F-Factor Methodology

“…In the same vein, when three such units are connected to the same bus, the F-factor for the combined storage capacity is equal to 37% (row1, column 7 in Table 1), and with five such units, the combined F-factor is equal to 27% (row 1, column 10 in Table 1). Hence, investing in increased storage capacity for a bus leads to reduced F-factor for the combined storage system, because according to equation (1), the achieved peak demand reduction is less than the increase in the total storage power capability. It is also interesting to note that any of the Tables 1-4 can be used to observe the phenomenon of degradation [39] of the energy storage unit, as shown in Figure 7.…”

“…The current paper presents the application, for the first time, of the F-factor metric for the evaluation of the energy storage security contribution. Specifically, the F-factor metric is defined as the ratio of P, which stands for the optimal reduction in peak demand (kW), over C, which stands for the power capability (kW) of the ES plant, as in Equation (1). In this regard, this metric is dimensionless and is expressed in percentage terms.…”

“…In this context, energy storage (ES) can constitute a technology option that can provide the required security of supply as well as a wide range of benefits to the electricity system operation and investment. Such benefits include strategic investment flexibility for the network planner to hedge against exogenous and endogenous uncertainty [1,2], support for the real-time balancing of electricity supply and demand [3] through the provision of ancillary services [4], power quality improvement [5], decentralized coordination of distributed energy resources within microgrids [6] and provision of security of supply through reduction of peak demand [7][8][9] via temporal arbitrage [10]. Such benefits can enable greater penetration of low-carbon generation resources, which can have environmental benefits as well as economic ones [11] given that low-carbon generation is characterized by lower operating costs than conventional generation based on fossil fuels.…”

Long-Term Expansion Planning of the Transmission Network in India under Multi-Dimensional Uncertainty

“…Through the deployment of energy storage, the planner obtains the "real" option to delay/defer or displace/avoid undertaking conventional investments. In this case, when there is at least one source of uncertainty considered in the model, the economic total net benefit accrued from the deployment of this technology is known as Option Value of energy storage [11,12].…”

“…In this context, smart grid technologies, such as energy storage, can constitute an option that can provide the required strategic flexibility, which will enable the network planner to hedge against the risk of stranded conventional assets by allowing the displacement and/or the deferral of large capital commitments on a conditional basis until the realization of a scenario suggests that they would be economically justified. This leads to the definition of the Option Value, which is the value of the total flexibility of energy storage, under the presence of uncertainty, and can be quantified as the net economic benefit accrued from its deployment in the system [11][12][13].…”