IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v283y2021ics0306261920316640.html
   My bibliography  Save this article

Synergies between energy arbitrage and fast frequency response for battery energy storage systems

Author

Listed:
  • Pusceddu, Elian
  • Zakeri, Behnam
  • Castagneto Gissey, Giorgio

Abstract

Energy storage can make key contributions to balancing future low-carbon energy systems by providing a variety of energy system services, with batteries expected to be widely deployed as costs fall with innovation. This paper assesses whether synergies exist between two of the most significant of these services, fast frequency response and energy arbitrage, if a battery energy storage system (BESS) is used to deliver both. A techno-economic model is developed to simulate 600 possible fast frequency response availability windows. Results show that two distinct synergies exist between the two services. The first synergy accounts for the possibility of charging outside the deadband for delivering fast frequency response. We propose an innovative state-of-charge management strategy to exploit this synergy. The second synergy results from energy arbitrage revenues being highly concentrated around peak times, which can enable a battery system to capture most of the arbitrage revenues without an excessive reduction in revenues from capacity provision with enhanced frequency response. The combination of these two synergies means that a battery system could increase its operating profits by 25% by delivering arbitrage and frequency response alternately. This result is shown to be statistically robust using historical data. A battery system able to discharge for 1.5–2 h at its full power rating will most most likely optimise these synergies.

Suggested Citation

  • Pusceddu, Elian & Zakeri, Behnam & Castagneto Gissey, Giorgio, 2021. "Synergies between energy arbitrage and fast frequency response for battery energy storage systems," Applied Energy, Elsevier, vol. 283(C).
    • Handle: RePEc:eee:appene:v:283:y:2021:i:c:s0306261920316640
    DOI: 10.1016/j.apenergy.2020.116274
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261920316640
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2020.116274?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. Merten, Michael & Rücker, Fabian & Schoeneberger, Ilka & Sauer, Dirk Uwe, 2020. "Automatic frequency restoration reserve market prediction: Methodology and comparison of various approaches," Applied Energy, Elsevier, vol. 268(C).
    2. 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.
    3. Greenwood, D.M. & Lim, K.Y. & Patsios, C. & Lyons, P.F. & Lim, Y.S. & Taylor, P.C., 2017. "Frequency response services designed for energy storage," Applied Energy, Elsevier, vol. 203(C), pages 115-127.
    4. Loisel, Rodica & Mercier, Arnaud & Gatzen, Christoph & Elms, Nick & Petric, Hrvoje, 2010. "Valuation framework for large scale electricity storage in a case with wind curtailment," Energy Policy, Elsevier, vol. 38(11), pages 7323-7337, November.
    5. Goutte, Stéphane & Vassilopoulos, Philippe, 2019. "The value of flexibility in power markets," Energy Policy, Elsevier, vol. 125(C), pages 347-357.
    6. Li, Canbing & Shi, Haiqing & Cao, Yijia & Wang, Jianhui & Kuang, Yonghong & Tan, Yi & Wei, Jing, 2015. "Comprehensive review of renewable energy curtailment and avoidance: A specific example in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1067-1079.
    7. Cheng, Meng & Sami, Saif Sabah & Wu, Jianzhong, 2017. "Benefits of using virtual energy storage system for power system frequency response," Applied Energy, Elsevier, vol. 194(C), pages 376-385.
    8. Luo, Xing & Wang, Jihong & Dooner, Mark & Clarke, Jonathan, 2015. "Overview of current development in electrical energy storage technologies and the application potential in power system operation," Applied Energy, Elsevier, vol. 137(C), pages 511-536.
    9. Lund, Peter D. & Lindgren, Juuso & Mikkola, Jani & Salpakari, Jyri, 2015. "Review of energy system flexibility measures to enable high levels of variable renewable electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 785-807.
    10. Li, Yong & He, Li & Liu, Fang & Tan, Yi & Cao, Yijia & Luo, Longfu & Shahidehpour, Mohammod, 2018. "A dynamic coordinated control strategy of WTG-ES combined system for short-term frequency support," Renewable Energy, Elsevier, vol. 119(C), pages 1-11.
    11. Poudineh, Rahmatallah & Jamasb, Tooraj, 2014. "Distributed generation, storage, demand response and energy efficiency as alternatives to grid capacity enhancement," Energy Policy, Elsevier, vol. 67(C), pages 222-231.
    12. 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.
    13. Cho, Joohyun & Kleit, Andrew N., 2015. "Energy storage systems in energy and ancillary markets: A backwards induction approach," Applied Energy, Elsevier, vol. 147(C), pages 176-183.
    14. Holger C. Hesse & Rodrigo Martins & Petr Musilek & Maik Naumann & Cong Nam Truong & Andreas Jossen, 2017. "Economic Optimization of Component Sizing for Residential Battery Storage Systems," Energies, MDPI, vol. 10(7), pages 1-19, June.
    15. Moreno, Rodrigo & Moreira, Roberto & Strbac, Goran, 2015. "A MILP model for optimising multi-service portfolios of distributed energy storage," Applied Energy, Elsevier, vol. 137(C), pages 554-566.
    16. 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.
    17. 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.
    18. He, Guannan & Ciez, Rebecca & Moutis, Panayiotis & Kar, Soummya & Whitacre, Jay F., 2020. "The economic end of life of electrochemical energy storage," Applied Energy, Elsevier, vol. 273(C).
    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. María Blecua-de-Pedro & Maryori C. Díaz-Ramírez, 2021. "Assessment of Potential Barriers to the Implementation of an Innovative AB-FB Energy Storage System under a Sustainable Perspective," Sustainability, MDPI, vol. 13(19), pages 1-16, October.
    2. Niko Karhula & Seppo Sierla & Valeriy Vyatkin, 2021. "Validating the Real-Time Performance of Distributed Energy Resources Participating on Primary Frequency Reserves," Energies, MDPI, vol. 14(21), pages 1-19, October.
    3. Nitsch, Felix & Deissenroth-Uhrig, Marc & Schimeczek, Christoph & Bertsch, Valentin, 2021. "Economic evaluation of battery storage systems bidding on day-ahead and automatic frequency restoration reserves markets," Applied Energy, Elsevier, vol. 298(C).
    4. Xia, Yuanxing & Xu, Qingshan & Chen, Lu & Du, Pengwei, 2022. "The flexible roles of distributed energy storages in peer-to-peer transactive energy market: A state-of-the-art review," Applied Energy, Elsevier, vol. 327(C).
    5. Wen, Kerui & Li, Weidong & Yu, Samson Shenglong & Li, Ping & Shi, Peng, 2022. "Optimal intra-day operations of behind-the-meter battery storage for primary frequency regulation provision: A hybrid lookahead method," Energy, Elsevier, vol. 247(C).
    6. Zakeri, Behnam & Gissey, Giorgio Castagneto & Dodds, Paul E. & Subkhankulova, Dina, 2021. "Centralized vs. distributed energy storage – Benefits for residential users," Energy, Elsevier, vol. 236(C).
    7. Joel Alpízar-Castillo & Laura Ramirez-Elizondo & Pavol Bauer, 2022. "Assessing the Role of Energy Storage in Multiple Energy Carriers toward Providing Ancillary Services: A Review," Energies, MDPI, vol. 16(1), pages 1-31, December.
    8. Sai, Wei & Pan, Zehua & Liu, Siyu & Jiao, Zhenjun & Zhong, Zheng & Miao, Bin & Chan, Siew Hwa, 2023. "Event-driven forecasting of wholesale electricity price and frequency regulation price using machine learning algorithms," Applied Energy, Elsevier, vol. 352(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. Ekaterina Bayborodina & Michael Negnevitsky & Evan Franklin & Alison Washusen, 2021. "Grid-Scale Battery Energy Storage Operation in Australian Electricity Spot and Contingency Reserve Markets," Energies, MDPI, vol. 14(23), pages 1-21, December.

    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. 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.
    2. Wu, Wei & Lin, Boqiang, 2018. "Application value of energy storage in power grid: A special case of China electricity market," Energy, Elsevier, vol. 165(PB), pages 1191-1199.
    3. Mahdavi, Sajad & Hemmati, Reza & Jirdehi, Mehdi Ahmadi, 2018. "Two-level planning for coordination of energy storage systems and wind-solar-diesel units in active distribution networks," Energy, Elsevier, vol. 151(C), pages 954-965.
    4. Antweiler, Werner, 2021. "Microeconomic models of electricity storage: Price Forecasting, arbitrage limits, curtailment insurance, and transmission line utilization," Energy Economics, Elsevier, vol. 101(C).
    5. Saboori, Hedayat & Hemmati, Reza & Ghiasi, Seyyed Mohammad Sadegh & Dehghan, Shahab, 2017. "Energy storage planning in electric power distribution networks – A state-of-the-art review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1108-1121.
    6. Javier L'opez Prol & Wolf-Peter Schill, 2020. "The Economics of Variable Renewables and Electricity Storage," Papers 2012.15371, arXiv.org.
    7. Lin, Boqiang & Wu, Wei, 2017. "Economic viability of battery energy storage and grid strategy: A special case of China electricity market," Energy, Elsevier, vol. 124(C), pages 423-434.
    8. Holger C. Hesse & Michael Schimpe & Daniel Kucevic & Andreas Jossen, 2017. "Lithium-Ion Battery Storage for the Grid—A Review of Stationary Battery Storage System Design Tailored for Applications in Modern Power Grids," Energies, MDPI, vol. 10(12), pages 1-42, December.
    9. Xie, Chunping & Hong, Yan & Ding, Yulong & Li, Yongliang & Radcliffe, Jonathan, 2018. "An economic feasibility assessment of decoupled energy storage in the UK: With liquid air energy storage as a case study," Applied Energy, Elsevier, vol. 225(C), pages 244-257.
    10. Lombardi, P. & Schwabe, F., 2017. "Sharing economy as a new business model for energy storage systems," Applied Energy, Elsevier, vol. 188(C), pages 485-496.
    11. Chen, Yang & Odukomaiya, Adewale & Kassaee, Saiid & O’Connor, Patrick & Momen, Ayyoub M. & Liu, Xiaobing & Smith, Brennan T., 2019. "Preliminary analysis of market potential for a hydropneumatic ground-level integrated diverse energy storage system," Applied Energy, Elsevier, vol. 242(C), pages 1237-1247.
    12. Weitzel, Timm & Glock, Christoph H., 2018. "Energy management for stationary electric energy storage systems: A systematic literature review," European Journal of Operational Research, Elsevier, vol. 264(2), pages 582-606.
    13. Gallo, A.B. & Simões-Moreira, J.R. & Costa, H.K.M. & Santos, M.M. & Moutinho dos Santos, E., 2016. "Energy storage in the energy transition context: A technology review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 800-822.
    14. Chyong, Chi Kong & Newbery, David, 2022. "A unit commitment and economic dispatch model of the GB electricity market – Formulation and application to hydro pumped storage," Energy Policy, Elsevier, vol. 170(C).
    15. Papadopoulos, Agis M., 2020. "Renewable energies and storage in small insular systems: Potential, perspectives and a case study," Renewable Energy, Elsevier, vol. 149(C), pages 103-114.
    16. Wang, Lu & Wei, Yi-Ming & Brown, Marilyn A., 2017. "Global transition to low-carbon electricity: A bibliometric analysis," Applied Energy, Elsevier, vol. 205(C), pages 57-68.
    17. Jun Zhao & Xiaonan Wang & Jinsheng Chu, 2022. "The Strategies for Increasing Grid-Integrated Share of Renewable Energy with Energy Storage and Existing Coal Fired Power Generation in China," Energies, MDPI, vol. 15(13), pages 1-18, June.
    18. Das, Choton K. & Bass, Octavian & Kothapalli, Ganesh & Mahmoud, Thair S. & Habibi, Daryoush, 2018. "Optimal placement of distributed energy storage systems in distribution networks using artificial bee colony algorithm," Applied Energy, Elsevier, vol. 232(C), pages 212-228.
    19. Koirala, Binod Prasad & van Oost, Ellen & van der Windt, Henny, 2018. "Community energy storage: A responsible innovation towards a sustainable energy system?," Applied Energy, Elsevier, vol. 231(C), pages 570-585.
    20. 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.

    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:283:y:2021:i:c:s0306261920316640. 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.