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The economy of wind-integrated-energy-storage projects in China's upcoming power market: A real options approach

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  • Liu, Yuanxin
  • Zheng, Ruijin
  • Chen, Sisi
  • Yuan, Jiahai

Abstract

Renewable energy is growing quickly in China, but curtailment is serious due to insufficient system flexibility. Integrated energy storage system is one of effective approaches to improve production profile and alleviate curtailment. In this study, we evaluate the value of wind-integrated energy storage (WIES) projects by combining methods of real options and net present value. We draw appropriate investment timing based on the dynamics of storage cost and degree of marketization. The medium-marketization or even high-marketization scenarios examined in this study will appear in five years. The results indicate that with a 10% learning rate of energy storage cost, the WIES project will be commercially justified in one year under high-level marketization scenario and in 3 years under medium-level marketization. Finally, we conclude with policy implications on market integration of renewable energy in China.

Suggested Citation

  • Liu, Yuanxin & Zheng, Ruijin & Chen, Sisi & Yuan, Jiahai, 2019. "The economy of wind-integrated-energy-storage projects in China's upcoming power market: A real options approach," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    • Handle: RePEc:eee:jrpoli:v:63:y:2019:i:c:7
    DOI: 10.1016/j.resourpol.2019.101434
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