IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v169y2022ics1364032122007882.html
   My bibliography  Save this article

Profitability analysis on demand-side flexibility: A review

Author

Listed:
  • Forero-Quintero, Jose-Fernando
  • Villafáfila-Robles, Roberto
  • Barja-Martinez, Sara
  • Munné-Collado, Ingrid
  • Olivella-Rosell, Pol
  • Montesinos-Miracle, Daniel

Abstract

Flexibility has emerged as an optimal solution to the increasing uncertainty in power systems produced by the continuous development and penetration of distributed generation based on renewable energy. Many studies have shown the benefits for system operators and stakeholders of diverse ancillary services derived from demand-side flexibility. Cost-benefit analysis on these flexibility services should be carried out to determine the profitable applications, as well as the required adjustments on energy market, price schemes and normative framework to maximize the positive impacts of the available flexibility. This paper endeavors to review the main topics, variables and indexes related to the profitability analysis on demand-side flexibility, as well as the influence of energy markets, pricing and standards on revenue maximization. The conclusions drawn from this review demonstrate that the profitability of flexibility services considerably de-pends on energy market structure, involved assets, electricity prices and current ancillary services remuneration.

Suggested Citation

  • Forero-Quintero, Jose-Fernando & Villafáfila-Robles, Roberto & Barja-Martinez, Sara & Munné-Collado, Ingrid & Olivella-Rosell, Pol & Montesinos-Miracle, Daniel, 2022. "Profitability analysis on demand-side flexibility: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    • Handle: RePEc:eee:rensus:v:169:y:2022:i:c:s1364032122007882
    DOI: 10.1016/j.rser.2022.112906
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032122007882
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2022.112906?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. Sovacool, Benjamin K. & Kester, Johannes & Noel, Lance & Zarazua de Rubens, Gerardo, 2020. "Actors, business models, and innovation activity systems for vehicle-to-grid (V2G) technology: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    2. Liu, Jian & Zhong, Caifu, 2019. "An economic evaluation of the coordination between electric vehicle storage and distributed renewable energy," Energy, Elsevier, vol. 186(C).
    3. Assunção, André & Moura, Pedro S. & de Almeida, Aníbal T., 2016. "Technical and economic assessment of the secondary use of repurposed electric vehicle batteries in the residential sector to support solar energy," Applied Energy, Elsevier, vol. 181(C), pages 120-131.
    4. Alizadeh, M.I. & Parsa Moghaddam, M. & Amjady, N. & Siano, P. & Sheikh-El-Eslami, M.K., 2016. "Flexibility in future power systems with high renewable penetration: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1186-1193.
    5. Dallinger, Bettina & Schwabeneder, Daniel & Lettner, Georg & Auer, Hans, 2019. "Socio-economic benefit and profitability analyses of Austrian hydro storage power plants supporting increasing renewable electricity generation in Central Europe," Renewable and Sustainable Energy Reviews, Elsevier, vol. 107(C), pages 482-496.
    6. Linda Barelli & Gianni Bidini & Paolo Cherubini & Andrea Micangeli & Dario Pelosi & Carlo Tacconelli, 2019. "How Hybridization of Energy Storage Technologies Can Provide Additional Flexibility and Competitiveness to Microgrids in the Context of Developing Countries," Energies, MDPI, vol. 12(16), pages 1-22, August.
    7. Naval, Natalia & Yusta, Jose M., 2021. "Virtual power plant models and electricity markets - A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    8. 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.
    9. Zhang, Mingze & Li, Weidong & Yu, Samson Shenglong & Wen, Kerui & Zhou, Chen & Shi, Peng, 2021. "A unified configurational optimization framework for battery swapping and charging stations considering electric vehicle uncertainty," Energy, Elsevier, vol. 218(C).
    10. Brown, T. & Schlachtberger, D. & Kies, A. & Schramm, S. & Greiner, M., 2018. "Synergies of sector coupling and transmission reinforcement in a cost-optimised, highly renewable European energy system," Energy, Elsevier, vol. 160(C), pages 720-739.
    11. Zakeri, Behnam & Cross, Samuel & Dodds, Paul.E. & Gissey, Giorgio Castagneto, 2021. "Policy options for enhancing economic profitability of residential solar photovoltaic with battery energy storage," Applied Energy, Elsevier, vol. 290(C).
    12. Bai, Bo & Xiong, Siqin & Song, Bo & Xiaoming, Ma, 2019. "Economic analysis of distributed solar photovoltaics with reused electric vehicle batteries as energy storage systems in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 109(C), pages 213-229.
    13. Mancarella, Pierluigi & Chicco, Gianfranco & Capuder, Tomislav, 2018. "Arbitrage opportunities for distributed multi-energy systems in providing power system ancillary services," Energy, Elsevier, vol. 161(C), pages 381-395.
    14. Sneum, Daniel Møller & González, Mario Garzón & Gea-Bermúdez, Juan, 2021. "Increased heat-electricity sector coupling by constraining biomass use?," Energy, Elsevier, vol. 222(C).
    15. Bjørndal, Endre & Bjørndal, Mette & Cai, Hong, 2014. "Nodal Pricing in a Coupled Electricity Market," Discussion Papers 2014/27, Norwegian School of Economics, Department of Business and Management Science.
    16. Sidhu, Arjan S. & Pollitt, Michael G. & Anaya, Karim L., 2018. "A social cost benefit analysis of grid-scale electrical energy storage projects: A case study," Applied Energy, Elsevier, vol. 212(C), pages 881-894.
    17. Barja-Martinez, Sara & Aragüés-Peñalba, Mònica & Munné-Collado, Íngrid & Lloret-Gallego, Pau & Bullich-Massagué, Eduard & Villafafila-Robles, Roberto, 2021. "Artificial intelligence techniques for enabling Big Data services in distribution networks: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    18. Xin-gang, Zhao & Zhen, Wang, 2019. "Technology, cost, economic performance of distributed photovoltaic industry in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 110(C), pages 53-64.
    19. Okur, Özge & Heijnen, Petra & Lukszo, Zofia, 2021. "Aggregator’s business models in residential and service sectors: A review of operational and financial aspects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 139(C).
    20. Poudineh, Rahmatallah & Rubino, Alessandro, 2017. "Business model for cross-border interconnections in the Mediterranean basin," Energy Policy, Elsevier, vol. 107(C), pages 96-108.
    21. Roach, Martin & Meeus, Leonardo, 2020. "The welfare and price effects of sector coupling with power-to-gas," Energy Economics, Elsevier, vol. 86(C).
    22. Bauwens, Thomas & Schraven, Daan & Drewing, Emily & Radtke, Jörg & Holstenkamp, Lars & Gotchev, Boris & Yildiz, Özgür, 2022. "Conceptualizing community in energy systems: A systematic review of 183 definitions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    23. Abdon, Andreas & Zhang, Xiaojin & Parra, David & Patel, Martin K. & Bauer, Christian & Worlitschek, Jörg, 2017. "Techno-economic and environmental assessment of stationary electricity storage technologies for different time scales," Energy, Elsevier, vol. 139(C), pages 1173-1187.
    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. Rusche, Simon & Weissflog., Jan & Wenninger, Simon & Häckel, Björn, 2023. "How flexible are energy flexibilities? Developing a flexibility score for revenue and risk analysis in industrial demand-side management," Applied Energy, Elsevier, vol. 345(C).
    2. Bao, Minglei & Hui, Hengyu & Ding, Yi & Sun, Xiaocong & Zheng, Chenghang & Gao, Xiang, 2023. "An efficient framework for exploiting operational flexibility of load energy hubs in risk management of integrated electricity-gas systems," Applied Energy, Elsevier, vol. 338(C).

    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. Maximilian Parzen & Fabian Neumann & Addrian H. Van Der Weijde & Daniel Friedrich & Aristides Kiprakis, 2021. "Beyond cost reduction: Improving the value of energy storage in electricity systems," Papers 2101.10092, arXiv.org, revised Jul 2022.
    2. Liu, Jia & Chen, Xi & Yang, Hongxing & Li, Yutong, 2020. "Energy storage and management system design optimization for a photovoltaic integrated low-energy building," Energy, Elsevier, vol. 190(C).
    3. Fernando Echevarría Camarero & Ana Ogando-Martínez & Pablo Durán Gómez & Pablo Carrasco Ortega, 2022. "Profitability of Batteries in Photovoltaic Systems for Small Industrial Consumers in Spain under Current Regulatory Framework and Energy Prices," Energies, MDPI, vol. 16(1), pages 1-19, December.
    4. Jasmine Ramsebner & Reinhard Haas & Amela Ajanovic & Martin Wietschel, 2021. "The sector coupling concept: A critical review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 10(4), July.
    5. Bergaentzle, Claire & Gunkel, Philipp Andreas, 2022. "Cross-sector flexibility, storage investment and the integration of renewables: Capturing the impacts of grid tariffs," Energy Policy, Elsevier, vol. 164(C).
    6. Aree Wangsupphaphol & Surachai Chaitusaney & Mohamed Salem, 2023. "A Techno-Economic Assessment of a Second-Life Battery and Photovoltaics Hybrid Power Source for Sustainable Electric Vehicle Home Charging," Sustainability, MDPI, vol. 15(7), pages 1-19, March.
    7. Sorknæs, Peter & Thellufsen, Jakob Zinck & Knobloch, Kai & Engelbrecht, Kurt & Yuan, Meng, 2023. "Economic potentials of carnot batteries in 100% renewable energy systems," Energy, Elsevier, vol. 282(C).
    8. Kim, Ju-Hee & Kim, Hee-Hoon & Yoo, Seung-Hoon, 2022. "Social acceptance toward constructing a combined heat and power plant near people's dwellings in South Korea," Energy, Elsevier, vol. 244(PB).
    9. Pinto, Edwin S. & Gronier, Timothé & Franquet, Erwin & Serra, Luis M., 2023. "Opportunities and economic assessment for a third-party delivering electricity, heat and cold to residential buildings," Energy, Elsevier, vol. 272(C).
    10. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2022. "The impact of a subsidized tax deduction on residential solar photovoltaic-battery energy storage systems," Utilities Policy, Elsevier, vol. 75(C).
    11. Rafael G. Nagel & Vitor Fernão Pires & Jony L. Silveira & Armando Cordeiro & Daniel Foito, 2023. "Financial Analysis of Household Photovoltaic Self-Consumption in the Context of the Vehicle-to-Home ( V2H ) in Portugal," Energies, MDPI, vol. 16(3), pages 1-21, January.
    12. Berger, Matthias & Schroeteler, Benjamin & Sperle, Helene & Püntener, Patrizia & Felder, Tom & Worlitschek, Jörg, 2022. "Assessment of residential scale renewable heating solutions with thermal energy storages," Energy, Elsevier, vol. 244(PA).
    13. Han, Xuejiao & Garrison, Jared & Hug, Gabriela, 2022. "Techno-economic analysis of PV-battery systems in Switzerland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    14. Keiner, Dominik & Thoma, Christian & Bogdanov, Dmitrii & Breyer, Christian, 2023. "Seasonal hydrogen storage for residential on- and off-grid solar photovoltaics prosumer applications: Revolutionary solution or niche market for the energy transition until 2050?," Applied Energy, Elsevier, vol. 340(C).
    15. Ruhnau, Oliver, 2022. "How flexible electricity demand stabilizes wind and solar market values: The case of hydrogen electrolyzers," Applied Energy, Elsevier, vol. 307(C).
    16. Alexandra G. Papadopoulou & George Vasileiou & Alexandros Flamos, 2020. "A Comparison of Dispatchable RES Technoeconomics: Is There a Niche for Concentrated Solar Power?," Energies, MDPI, vol. 13(18), pages 1-22, September.
    17. Pesch, Thiemo & Allelein, Hans-Josef & Müller, Dirk & Witthaut, Dirk, 2020. "High-performance charging for the electrification of highway traffic: Optimal operation, infrastructure requirements and economic viability," Applied Energy, Elsevier, vol. 280(C).
    18. Osorio-Aravena, Juan Carlos & Aghahosseini, Arman & Bogdanov, Dmitrii & Caldera, Upeksha & Ghorbani, Narges & Mensah, Theophilus Nii Odai & Haas, Jannik & Muñoz-Cerón, Emilio & Breyer, Christian, 2023. "Synergies of electrical and sectoral integration: Analysing geographical multi-node scenarios with sector coupling variations for a transition towards a fully renewables-based energy system," Energy, Elsevier, vol. 279(C).
    19. Fernando Salinas-Herrera & Ali Moeini & Innocent Kamwa, 2022. "Survey of Simulation Tools to Assess Techno-Economic Benefits of Smart Grid Technology in Integrated T&D Systems," Sustainability, MDPI, vol. 14(13), pages 1-36, July.
    20. Lai, Chun Sing & Locatelli, Giorgio & Pimm, Andrew & Tao, Yingshan & Li, Xuecong & Lai, Loi Lei, 2019. "A financial model for lithium-ion storage in a photovoltaic and biogas energy system," Applied Energy, Elsevier, vol. 251(C), pages 1-1.

    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:rensus:v:169:y:2022:i:c:s1364032122007882. 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/600126/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.