Techno-economic optimization of hybrid steam-electric energy systems with excess heat utilization and reserve market participation

This study investigates the economic viability and optimal configuration of a hybrid industrial energy system combining an electrode boiler, steam accumulator, and battery energy storage system (BESS). This research is motivated by the need for industrial electrification, while maintaining grid resiliency. The primary contribution of this work is a techno-economic framework for comparing energy storage solutions under different markets structures, with participation in reserve market, energy price arbitrage, and peak shaving. This study optimizes system operation for an industrial site with a yearly steam consumption of 44.6 × 106 kg or equivalent to 3.5GWh, with the aim to minimize net energy costs. The optimization framework incorporates load shifting, peak shaving, and frequency containment reserve market participation with hourly 2024 data from Norway and Germany. Net present value (NPV) analysis was performed to determine the most cost-efficient energy storage configurations. The results show that current investment costs favor steam accumulators over BESS as energy storage in both countries. However, a 25% reduction in BESS cost will make batteries economically competitive, particularly in Germany, where high price volatility and power-based grid tariffs provide stronger incentives for load shifting and peak shaving. We find that the optimal mass capacity for the steam accumulator in Germany is nearly five times larger than in Norway. Participation in the FCR market and excess heat utilization proved critical, providing profits up to 17% and 10% of the energy costs for Norway and Germany, respectively. We conclude that while steam accumulators are the most cost-effective solution today, a moderate 25% reduction in BESS investment costs would make it the most cost-effective choice for industries in volatile, renewable-based power grids like Germany’s.