IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v22y2013icp298-305.html
   My bibliography  Save this article

The operational economics of compressed air energy storage systems under uncertainty

Author

Listed:
  • Yucekaya, Ahmet

Abstract

A Compressed Air Energy Storage System is a means of storing energy which can then be used when the demand for energy increases. In this system, air is compressed in a cavern when power prices are low, and this air is used to run a natural gas-fired turbine to generate power when prices go up, with the aim of profiting from the price difference. This type of system can independently compress air, generate electricity, or do both. However, the prices of electricity and natural gas fluctuate, which directly impacts the amount of revenue that can be made, and this requires the calculating of estimates to optimize operation strategies and maximize profit. For these reasons, this is a crucial energy storage technology that requires economic analyses to justify investment decisions in power markets. In this paper, a mixed integer programming method is developed to schedule the operation of the system for forward market prices that are estimated using a markov-based probabilistic model. Then an algorithm that includes two separate modules in a simulation is employed to optimize the annual operation of the system. The paper presents a case study for Turkey as well as economic analyses based on probabilistic forward prices and the profits obtained from the optimization module.

Suggested Citation

  • Yucekaya, Ahmet, 2013. "The operational economics of compressed air energy storage systems under uncertainty," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 298-305.
    • Handle: RePEc:eee:rensus:v:22:y:2013:i:c:p:298-305
    DOI: 10.1016/j.rser.2013.01.047
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032113000786
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2013.01.047?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. Hadjipaschalis, Ioannis & Poullikkas, Andreas & Efthimiou, Venizelos, 2009. "Overview of current and future energy storage technologies for electric power applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(6-7), pages 1513-1522, August.
    2. 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.
    3. Hartmann, Niklas & Vöhringer, O. & Kruck, C. & Eltrop, L., 2012. "Simulation and analysis of different adiabatic Compressed Air Energy Storage plant configurations," Applied Energy, Elsevier, vol. 93(C), pages 541-548.
    4. Sharma, A. & Chiu, H.H. & Ahrens, F.W. & Ahluwalia, R.K. & Ragsdell, K.M., 1979. "Design of optimum compressed air energy-storage systems," Energy, Elsevier, vol. 4(2), pages 201-216.
    5. Denholm, Paul & Sioshansi, Ramteen, 2009. "The value of compressed air energy storage with wind in transmission-constrained electric power systems," Energy Policy, Elsevier, vol. 37(8), pages 3149-3158, August.
    6. Kaldellis, J.K. & Zafirakis, D. & Kavadias, K., 2009. "Techno-economic comparison of energy storage systems for island autonomous electrical networks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(2), pages 378-392, February.
    7. 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.
    8. Cavallo, Alfred, 2007. "Controllable and affordable utility-scale electricity from intermittent wind resources and compressed air energy storage (CAES)," Energy, Elsevier, vol. 32(2), pages 120-127.
    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. Adebayo, Abiola I. & Zamani-Dehkordi, Payam & Zareipour, Hamidreza & Knight, Andrew M., 2018. "Impacts of transmission tariff on price arbitrage operation of energy storage system in Alberta electricity market," Utilities Policy, Elsevier, vol. 52(C), pages 1-12.
    2. Østergaard, P.A. & Lund, H. & Thellufsen, J.Z. & Sorknæs, P. & Mathiesen, B.V., 2022. "Review and validation of EnergyPLAN," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    3. Arcos-Vargas, Ángel & Canca, David & Núñez, Fernando, 2020. "Impact of battery technological progress on electricity arbitrage: An application to the Iberian market," Applied Energy, Elsevier, vol. 260(C).
    4. Szablowski, Lukasz & Krawczyk, Piotr & Badyda, Krzysztof & Karellas, Sotirios & Kakaras, Emmanuel & Bujalski, Wojciech, 2017. "Energy and exergy analysis of adiabatic compressed air energy storage system," Energy, Elsevier, vol. 138(C), pages 12-18.
    5. Núñez, Fernando & Canca, David & Arcos-Vargas, Ángel, 2022. "An assessment of European electricity arbitrage using storage systems," Energy, Elsevier, vol. 242(C).
    6. Lukasz Szablowski & Piotr Krawczyk & Marcin Wolowicz, 2021. "Exergy Analysis of Adiabatic Liquid Air Energy Storage (A-LAES) System Based on Linde–Hampson Cycle," Energies, MDPI, vol. 14(4), pages 1-16, February.
    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. de Bosio, Federico & Verda, Vittorio, 2015. "Thermoeconomic analysis of a Compressed Air Energy Storage (CAES) system integrated with a wind power plant in the framework of the IPEX Market," Applied Energy, Elsevier, vol. 152(C), pages 173-182.
    9. Krawczyk, Piotr & Szabłowski, Łukasz & Karellas, Sotirios & Kakaras, Emmanuel & Badyda, Krzysztof, 2018. "Comparative thermodynamic analysis of compressed air and liquid air energy storage systems," Energy, Elsevier, vol. 142(C), pages 46-54.
    10. Guo, Hao & Gong, Maoqiong & Sun, Hailiang, 2021. "Performance analysis of a novel energy storage system based on the combination of positive and reverse organic Rankine cycles," Energy, Elsevier, vol. 231(C).
    11. Cao, Yan & A. Dhahad, Hayder & Alsharif, Sameer & El-Shorbagy, M.A. & Sharma, Kamal & E. Anqi, Ali & Rashidi, Shima & A. Shamseldin, Mohamed & Shafay, Amel S., 2022. "Predication of the sensitivity of a novel daily triple-periodic solar-based electricity/hydrogen cogeneration system with storage units: Dual parametric analysis and NSGA-II optimization," Renewable Energy, Elsevier, vol. 192(C), pages 340-360.
    12. Menéndez, Javier & Ordónez, Almudena & Fernández-Oro, Jesús M. & Loredo, Jorge & Díaz-Aguado, María B., 2020. "Feasibility analysis of using mine water from abandoned coal mines in Spain for heating and cooling of buildings," Renewable Energy, Elsevier, vol. 146(C), pages 1166-1176.
    13. Venkataramani, Gayathri & Parankusam, Prasanna & Ramalingam, Velraj & Wang, Jihong, 2016. "A review on compressed air energy storage – A pathway for smart grid and polygeneration," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 895-907.
    14. Xia, Tian & Li, Yaowang & Zhang, Ning & Kang, Chongqing, 2022. "Role of compressed air energy storage in urban integrated energy systems with increasing wind penetration," Renewable and Sustainable Energy Reviews, Elsevier, vol. 160(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. Foley, A. & Díaz Lobera, I., 2013. "Impacts of compressed air energy storage plant on an electricity market with a large renewable energy portfolio," Energy, Elsevier, vol. 57(C), pages 85-94.
    2. Succar, Samir & Denkenberger, David C. & Williams, Robert H., 2012. "Optimization of specific rating for wind turbine arrays coupled to compressed air energy storage," Applied Energy, Elsevier, vol. 96(C), pages 222-234.
    3. 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.
    4. Díaz-González, Francisco & Sumper, Andreas & Gomis-Bellmunt, Oriol & Villafáfila-Robles, Roberto, 2012. "A review of energy storage technologies for wind power applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 2154-2171.
    5. Jannelli, E. & Minutillo, M. & Lubrano Lavadera, A. & Falcucci, G., 2014. "A small-scale CAES (compressed air energy storage) system for stand-alone renewable energy power plant for a radio base station: A sizing-design methodology," Energy, Elsevier, vol. 78(C), pages 313-322.
    6. 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).
    7. Antweiler, Werner, 2021. "Microeconomic models of electricity storage: Price Forecasting, arbitrage limits, curtailment insurance, and transmission line utilization," Energy Economics, Elsevier, vol. 101(C).
    8. 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.
    9. Venkataramani, Gayathri & Parankusam, Prasanna & Ramalingam, Velraj & Wang, Jihong, 2016. "A review on compressed air energy storage – A pathway for smart grid and polygeneration," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 895-907.
    10. 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.
    11. Emiliano Borri & Alessio Tafone & Gabriele Comodi & Alessandro Romagnoli & Luisa F. Cabeza, 2022. "Compressed Air Energy Storage—An Overview of Research Trends and Gaps through a Bibliometric Analysis," Energies, MDPI, vol. 15(20), pages 1-21, October.
    12. Berrada, Asmae & Loudiyi, Khalid & Zorkani, Izeddine, 2016. "Valuation of energy storage in energy and regulation markets," Energy, Elsevier, vol. 115(P1), pages 1109-1118.
    13. 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.
    14. 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.
    15. 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.
    16. He, Qing & Li, Guoqing & Lu, Chang & Du, Dongmei & Liu, Wenyi, 2019. "A compressed air energy storage system with variable pressure ratio and its operation control," Energy, Elsevier, vol. 169(C), pages 881-894.
    17. Farihan Mohamad & Jiashen Teh & Ching-Ming Lai & Liang-Rui Chen, 2018. "Development of Energy Storage Systems for Power Network Reliability: A Review," Energies, MDPI, vol. 11(9), pages 1-19, August.
    18. Facci, Andrea L. & Sánchez, David & Jannelli, Elio & Ubertini, Stefano, 2015. "Trigenerative micro compressed air energy storage: Concept and thermodynamic assessment," Applied Energy, Elsevier, vol. 158(C), pages 243-254.
    19. 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).
    20. Guangyue Gu & Youliang Lao & Yaxiong Ji & Shasha Yuan & Haijing Liu & Peng Du, 2023. "Development of hybrid super-capacitor and lead-acid battery power storage systems," International Journal of Low-Carbon Technologies, Oxford University Press, vol. 18, pages 159-166.

    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:22:y:2013:i:c:p:298-305. 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.