IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v124y2014icp274-282.html
   My bibliography  Save this article

Utility scale energy storage and the need for flexible capacity metrics

Author

Listed:
  • Cutter, Eric
  • Haley, Ben
  • Hargreaves, Jeremy
  • Williams, Jim

Abstract

Traditionally, capacity has been procured to meet system peak load with no formal regard for flexibility characteristics. However, this planning paradigm is shifting, with increasing variable energy resource penetration, to consider system flexibility requirements in addition to peak capacity. Flexibility is broadly defined as the capability of system operators to respond to changing loads net of intermittent renewable generation. It can be provided by energy storage, but also by gas-fired generation, enhancement of existing resources, responsive loads, new or redefined ancillary services and operational rule changes. We show that traditional cost of new entry (CONE) capacity planning metrics fail to fairly represent the net cost of different types of flexible capacity resources. We contribute to existing literature by using a mixed integer linear program to (1) optimize the dispatch of three bulk energy storage technologies and a conventional combustion turbine (CT) and (2) co-optimize their dispatch as price-takers first in day-ahead and subsequently in real-time energy and ancillary service markets. We then define a “flexible capacity” CONE and demonstrate, that even without premium “pay-for-performance” payments, bulk energy storage can be cost competitive with a CT as a flexible resource in today’s markets.

Suggested Citation

  • Cutter, Eric & Haley, Ben & Hargreaves, Jeremy & Williams, Jim, 2014. "Utility scale energy storage and the need for flexible capacity metrics," Applied Energy, Elsevier, vol. 124(C), pages 274-282.
    • Handle: RePEc:eee:appene:v:124:y:2014:i:c:p:274-282
    DOI: 10.1016/j.apenergy.2014.03.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261914002335
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2014.03.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paul L. Joskow, 2006. "Markets for Power in the United States: An Interim Assessment," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 1-36.
    2. Drury, Easan & Denholm, Paul & Sioshansi, Ramteen, 2011. "The value of compressed air energy storage in energy and reserve markets," Energy, Elsevier, vol. 36(8), pages 4959-4973.
    3. Cramton, Peter & Stoft, Steven, 2005. "A Capacity Market that Makes Sense," The Electricity Journal, Elsevier, vol. 18(7), pages 43-54.
    4. Paul L. Joskow, 2008. "Lessons Learned from Electricity Market Liberalization," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 9-42.
    5. Walawalkar, Rahul & Apt, Jay & Mancini, Rick, 2007. "Economics of electric energy storage for energy arbitrage and regulation in New York," Energy Policy, Elsevier, vol. 35(4), pages 2558-2568, April.
    6. Sioshansi, Ramteen & Denholm, Paul & Jenkin, Thomas & Weiss, Jurgen, 2009. "Estimating the value of electricity storage in PJM: Arbitrage and some welfare effects," Energy Economics, Elsevier, vol. 31(2), pages 269-277, March.
    7. AfDB AfDB, . "Annual Report 2012," Annual Report, African Development Bank, number 461.
    8. Sioshansi, Ramteen & Denholm, Paul & Jenkin, Thomas, 2011. "A comparative analysis of the value of pure and hybrid electricity storage," Energy Economics, Elsevier, vol. 33(1), pages 56-66, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Jinghua & Fang, Jiakun & Zeng, Qing & Chen, Zhe, 2016. "Optimal operation of the integrated electrical and heating systems to accommodate the intermittent renewable sources," Applied Energy, Elsevier, vol. 167(C), pages 244-254.
    2. Kevin Marnell & Manasseh Obi & Robert Bass, 2019. "Transmission-Scale Battery Energy Storage Systems: A Systematic Literature Review," Energies, MDPI, vol. 12(23), pages 1-31, December.
    3. Shen, Lu & Dou, Xiaobo & Long, Huan & Li, Chen & Chen, Kang & Zhou, Ji, 2021. "A collaborative voltage optimization utilizing flexibility of community heating systems for high PV penetration," Energy, Elsevier, vol. 232(C).
    4. Vorushylo, I. & Keatley, P. & Hewitt, NJ, 2016. "Most promising flexible generators for the wind dominated market," Energy Policy, Elsevier, vol. 96(C), pages 564-575.
    5. Elishav, Oren & Lewin, Daniel R. & Shter, Gennady E. & Grader, Gideon S., 2017. "The nitrogen economy: Economic feasibility analysis of nitrogen-based fuels as energy carriers," Applied Energy, Elsevier, vol. 185(P1), pages 183-188.
    6. Zeng, Qing & Fang, Jiakun & Li, Jinghua & Chen, Zhe, 2016. "Steady-state analysis of the integrated natural gas and electric power system with bi-directional energy conversion," Applied Energy, Elsevier, vol. 184(C), pages 1483-1492.
    7. Mallapragada, Dharik S. & Sepulveda, Nestor A. & Jenkins, Jesse D., 2020. "Long-run system value of battery energy storage in future grids with increasing wind and solar generation," Applied Energy, Elsevier, vol. 275(C).
    8. Dranka, Géremi Gilson & Ferreira, Paula & Vaz, A. Ismael F., 2021. "A review of co-optimization approaches for operational and planning problems in the energy sector," Applied Energy, Elsevier, vol. 304(C).
    9. Kazemi, Mehdi & Siano, Pierluigi & Sarno, Debora & Goudarzi, Arman, 2016. "Evaluating the impact of sub-hourly unit commitment method on spinning reserve in presence of intermittent generators," Energy, Elsevier, vol. 113(C), pages 338-354.
    10. Arabkoohsar, A. & Dremark-Larsen, M. & Lorentzen, R. & Andresen, G.B., 2017. "Subcooled compressed air energy storage system for coproduction of heat, cooling and electricity," Applied Energy, Elsevier, vol. 205(C), pages 602-614.
    11. Beevers, D. & Branchini, L. & Orlandini, V. & De Pascale, A. & Perez-Blanco, H., 2015. "Pumped hydro storage plants with improved operational flexibility using constant speed Francis runners," Applied Energy, Elsevier, vol. 137(C), pages 629-637.
    12. Abdilahi, Abdirahman M. & Mustafa, Mohd Wazir & Abujarad, Saleh Y. & Mustapha, Mamunu, 2018. "Harnessing flexibility potential of flexible carbon capture power plants for future low carbon power systems: Review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 3101-3110.
    13. de Sisternes, Fernando J. & Jenkins, Jesse D. & Botterud, Audun, 2016. "The value of energy storage in decarbonizing the electricity sector," Applied Energy, Elsevier, vol. 175(C), pages 368-379.
    14. Li, Zhengshuo & Guo, Qinglai & Sun, Hongbin & Wang, Jianhui, 2015. "Storage-like devices in load leveling: Complementarity constraints and a new and exact relaxation method," Applied Energy, Elsevier, vol. 151(C), pages 13-22.
    15. Babacan, Oytun & Ratnam, Elizabeth L. & Disfani, Vahid R. & Kleissl, Jan, 2017. "Distributed energy storage system scheduling considering tariff structure, energy arbitrage and solar PV penetration," Applied Energy, Elsevier, vol. 205(C), pages 1384-1393.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Berrada, Asmae & Loudiyi, Khalid & Zorkani, Izeddine, 2016. "Valuation of energy storage in energy and regulation markets," Energy, Elsevier, vol. 115(P1), pages 1109-1118.
    2. Barbry, Adrien & Anjos, Miguel F. & Delage, Erick & Schell, Kristen R., 2019. "Robust self-scheduling of a price-maker energy storage facility in the New York electricity market," Energy Economics, Elsevier, vol. 78(C), pages 629-646.
    3. Shafiee, Soroush & Zamani-Dehkordi, Payam & Zareipour, Hamidreza & Knight, Andrew M., 2016. "Economic assessment of a price-maker energy storage facility in the Alberta electricity market," Energy, Elsevier, vol. 111(C), pages 537-547.
    4. Bradbury, Kyle & Pratson, Lincoln & Patiño-Echeverri, Dalia, 2014. "Economic viability of energy storage systems based on price arbitrage potential in real-time U.S. electricity markets," Applied Energy, Elsevier, vol. 114(C), pages 512-519.
    5. Ramteen Sioshansi & Paul Denholm & Thomas Jenkin, 2012. "Market and Policy Barriers to Deployment of Energy Storage," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    6. Hittinger, Eric & Lueken, Roger, 2015. "Is inexpensive natural gas hindering the grid energy storage industry?," Energy Policy, Elsevier, vol. 87(C), pages 140-152.
    7. Zakeri, Behnam & Syri, Sanna, 2015. "Electrical energy storage systems: A comparative life cycle cost analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 569-596.
    8. McConnell, Dylan & Forcey, Tim & Sandiford, Mike, 2015. "Estimating the value of electricity storage in an energy-only wholesale market," Applied Energy, Elsevier, vol. 159(C), pages 422-432.
    9. Boffino, Luigi & Conejo, Antonio J. & Sioshansi, Ramteen & Oggioni, Giorgia, 2019. "A two-stage stochastic optimization planning framework to decarbonize deeply electric power systems," Energy Economics, Elsevier, vol. 84(C).
    10. Metz, Dennis & Saraiva, João Tomé, 2018. "Simultaneous co-integration of multiple electrical storage applications in a consumer setting," Energy, Elsevier, vol. 143(C), pages 202-211.
    11. Berrada, Asmae & Loudiyi, Khalid & Zorkani, Izeddine, 2017. "Profitability, risk, and financial modeling of energy storage in residential and large scale applications," Energy, Elsevier, vol. 119(C), pages 94-109.
    12. Drury, Easan & Denholm, Paul & Sioshansi, Ramteen, 2011. "The value of compressed air energy storage in energy and reserve markets," Energy, Elsevier, vol. 36(8), pages 4959-4973.
    13. Daniel R. Jiang & Warren B. Powell, 2015. "Optimal Hour-Ahead Bidding in the Real-Time Electricity Market with Battery Storage Using Approximate Dynamic Programming," INFORMS Journal on Computing, INFORMS, vol. 27(3), pages 525-543, August.
    14. Zucker, Andreas & Hinchliffe, Timothée, 2014. "Optimum sizing of PV-attached electricity storage according to power market signals – A case study for Germany and Italy," Applied Energy, Elsevier, vol. 127(C), pages 141-155.
    15. Khan, Agha Salman M. & Verzijlbergh, Remco A. & Sakinci, Ozgur Can & De Vries, Laurens J., 2018. "How do demand response and electrical energy storage affect (the need for) a capacity market?," Applied Energy, Elsevier, vol. 214(C), pages 39-62.
    16. Antweiler, Werner, 2021. "Microeconomic models of electricity storage: Price Forecasting, arbitrage limits, curtailment insurance, and transmission line utilization," Energy Economics, Elsevier, vol. 101(C).
    17. Blanco, Herib & Faaij, André, 2018. "A review at the role of storage in energy systems with a focus on Power to Gas and long-term storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1049-1086.
    18. Zafirakis, Dimitrios & Chalvatzis, Konstantinos J. & Baiocchi, Giovanni & Daskalakis, Georgios, 2016. "The value of arbitrage for energy storage: Evidence from European electricity markets," Applied Energy, Elsevier, vol. 184(C), pages 971-986.
    19. Jeon, Wooyoung & Mo, Jung Youn, 2018. "The true economic value of supply-side energy storage in the smart grid environment – The case of Korea," Energy Policy, Elsevier, vol. 121(C), pages 101-111.
    20. Fares, Robert L. & Webber, Michael E., 2014. "A flexible model for economic operational management of grid battery energy storage," Energy, Elsevier, vol. 78(C), pages 768-776.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:124:y:2014:i:c:p:274-282. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.