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Liquid air energy storage: Price arbitrage operations and sizing optimization in the GB real-time electricity market

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  • Lin, Boqiang
  • Wu, Wei
  • Bai, Mengqi
  • Xie, Chunping
  • Radcliffe, Jonathan

Abstract

Liquid air energy storage is a novel proven technology that has the potential to increase the penetration of renewable on the power network and in the meanwhile to obtain revenues through energy price arbitrage. This paper proposes a methodology to evaluate the economic viability of liquid air energy storage based on price arbitrage operations in the GB real-time electricity market. The arbitrage algorithm designed in this article determines price thresholds every half hour under different operation strategies and according to which, decisions are made for the system to charge, discharge or stand by, and the optimal design of the size of different components for the system are also evaluated. Results suggest that the 12 prognostic is the best operating strategy, and under which a 200 MW LAES system is able to achieve a positive net present value of £43.8 M. Without using waste heat, the payback period for a 200 MW system can be as long as 36.9 to 39.4 years, depending on which arbitrage strategy is applied. However, with waste heat of 150 °C adopted, the payback period can be shortened to 8.7–9.8 years.

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  • Lin, Boqiang & Wu, Wei & Bai, Mengqi & Xie, Chunping & Radcliffe, Jonathan, 2019. "Liquid air energy storage: Price arbitrage operations and sizing optimization in the GB real-time electricity market," Energy Economics, Elsevier, vol. 78(C), pages 647-655.
    • Handle: RePEc:eee:eneeco:v:78:y:2019:i:c:p:647-655
    DOI: 10.1016/j.eneco.2018.11.035
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    Cited by:

    1. Qi, Meng & Park, Jinwoo & Lee, Inkyu & Moon, Il, 2022. "Liquid air as an emerging energy vector towards carbon neutrality: A multi-scale systems perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
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    4. Wang, Chen & Zhang, Xiaosong & You, Zhanping & Zhang, Muxing & Huang, Shifang & She, Xiaohui, 2021. "The effect of air purification on liquid air energy storage – An analysis from molecular to systematic modelling," Applied Energy, Elsevier, vol. 300(C).
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    6. Tafone, Alessio & Ding, Yulong & Li, Yongliang & Xie, Chunping & Romagnoli, Alessandro, 2020. "Levelised Cost of Storage (LCOS) analysis of liquid air energy storage system integrated with Organic Rankine Cycle," Energy, Elsevier, vol. 198(C).
    7. Wu, Wei & Lin, Boqiang & Xie, Chunping & Elliott, Robert J.R. & Radcliffe, Jonathan, 2020. "Does energy storage provide a profitable second life for electric vehicle batteries?," Energy Economics, Elsevier, vol. 92(C).
    8. O'Callaghan, O. & Donnellan, P., 2021. "Liquid air energy storage systems: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).
    9. Yuan, Meng & Sorknæs, Peter & Lund, Henrik & Liang, Yongtu, 2022. "The bidding strategies of large-scale battery storage in 100% renewable smart energy systems," Applied Energy, Elsevier, vol. 326(C).
    10. Wang, Chen & Akkurt, Nevzat & Zhang, Xiaosong & Luo, Yimo & She, Xiaohui, 2020. "Techno-economic analyses of multi-functional liquid air energy storage for power generation, oxygen production and heating," Applied Energy, Elsevier, vol. 275(C).
    11. Borri, Emiliano & Tafone, Alessio & Romagnoli, Alessandro & Comodi, Gabriele, 2021. "A review on liquid air energy storage: History, state of the art and recent developments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    12. Yang Xu & Jiahua Hu & Yizheng Wang & Weiwei Zhang & Wei Wu, 2022. "Understanding the Economic Responses to China’s Electricity Price-Cutting Policy: Evidence from Zhejiang Province," Sustainability, MDPI, vol. 14(18), pages 1-24, September.
    13. Mercier, Thomas & Olivier, Mathieu & De Jaeger, Emmanuel, 2023. "The value of electricity storage arbitrage on day-ahead markets across Europe," Energy Economics, Elsevier, vol. 123(C).
    14. Vecchi, Andrea & Naughton, James & Li, Yongliang & Mancarella, Pierluigi & Sciacovelli, Adriano, 2020. "Multi-mode operation of a Liquid Air Energy Storage (LAES) plant providing energy arbitrage and reserve services – Analysis of optimal scheduling and sizing through MILP modelling with integrated ther," Energy, Elsevier, vol. 200(C).
    15. Mylena Vieira Pinto Menezes & Icaro Figueiredo Vilasboas & Julio Augusto Mendes da Silva, 2022. "Liquid Air Energy Storage System (LAES) Assisted by Cryogenic Air Rankine Cycle (ARC)," Energies, MDPI, vol. 15(8), pages 1-16, April.
    16. Lamp, Stefan & Samano, Mario, 2022. "Large-scale battery storage, short-term market outcomes, and arbitrage," Energy Economics, Elsevier, vol. 107(C).
    17. Vecchi, Andrea & Li, Yongliang & Mancarella, Pierluigi & Sciacovelli, Adriano, 2020. "Integrated techno-economic assessment of Liquid Air Energy Storage (LAES) under off-design conditions: Links between provision of market services and thermodynamic performance," Applied Energy, Elsevier, vol. 262(C).
    18. He, Xiufen & Liu, Yunong & Rehman, Ali & Wang, Li, 2022. "Feasibility and performance analysis of a novel air separation unit with energy storage and air recovery," Renewable Energy, Elsevier, vol. 195(C), pages 598-619.

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    More about this item

    Keywords

    Liquid air energy storage (LAES); Real-time electricity market; Operation strategy; Price arbitrage; Sizing optimization;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

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