Arbitrage analysis for different energy storage technologies and strategies

The time-varying mismatch between electricity supply and demand is a growing challenge for the electricity market. This difference will be exacerbated with the fast-growing renewable energy penetration to the grid, due to its inherent volatility. Energy storage systems can offer a solution for this...

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Autores principales:	Xinjing Zhang, Chao (Chris) Qin, Eric Loth, Yujie Xu, Xuezhi Zhou, Haisheng Chen
Formato:	article
Lenguaje:	EN
Publicado:	Elsevier 2021
Materias:	Energy Storage Electricity price arbitrage Revenue Breakeven cost of storage Electrical engineering. Electronics. Nuclear engineering TK1-9971
Acceso en línea:	https://doaj.org/article/0c6eab909e5d48d0a9143d699a40d4b4
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spelling	oai:doaj.org-article:0c6eab909e5d48d0a9143d699a40d4b42021-11-28T04:34:14ZArbitrage analysis for different energy storage technologies and strategies2352-484710.1016/j.egyr.2021.09.009https://doaj.org/article/0c6eab909e5d48d0a9143d699a40d4b42021-11-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S2352484721008143https://doaj.org/toc/2352-4847The time-varying mismatch between electricity supply and demand is a growing challenge for the electricity market. This difference will be exacerbated with the fast-growing renewable energy penetration to the grid, due to its inherent volatility. Energy storage systems can offer a solution for this demand-generation imbalance, while generating economic benefits through the arbitrage in terms of electricity prices difference. In the present study, a method to estimate the potential revenues of typical energy storage systems is developed. The revenue is considered as the income from the energy storage plant with various roundtrip efficiencies. Thus, an optimal methodology was developed to determine the largest revenue through the charging and discharging operations based on the price profile. It is then applied to the California market in the United States to investigate the potential economic performance of three primary energy storage technologies: Lithium-Ion Batteries, Compressed Air Energy Storage and Pumped Hydro Storage. In particular, the maximum daily revenue from arbitrage is calculated considering various strategies of charging and discharging times as well as the technology’s roundtrip efficiency. The estimated capacity cost of energy storage for different loan periods is also estimated to determine the breakeven cost of the different energy storage technologies for an arbitrage application scenario. Pumped hydro storage (PHS) is found to be the most cost-effective but is not a good candidate for increased capacity in many countries due to concerns associated with developing new dams. Compressed Air Energy Storage (CAES), was found to be the second most cost-effective but still requires much more technology development before it is ready for widespread usage. Lithium battery is well-developed but is currently much too costly (by a factor of four) for a large scale energy storage application. The proposed method can be applied as these and other technologies and their associated costs evolve.Xinjing ZhangChao (Chris) QinEric LothYujie XuXuezhi ZhouHaisheng ChenElsevierarticleEnergy StorageElectricity price arbitrageRevenueBreakeven cost of storageElectrical engineering. Electronics. Nuclear engineeringTK1-9971ENEnergy Reports, Vol 7, Iss , Pp 8198-8206 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Energy Storage Electricity price arbitrage Revenue Breakeven cost of storage Electrical engineering. Electronics. Nuclear engineering TK1-9971
spellingShingle	Energy Storage Electricity price arbitrage Revenue Breakeven cost of storage Electrical engineering. Electronics. Nuclear engineering TK1-9971 Xinjing Zhang Chao (Chris) Qin Eric Loth Yujie Xu Xuezhi Zhou Haisheng Chen Arbitrage analysis for different energy storage technologies and strategies
description	The time-varying mismatch between electricity supply and demand is a growing challenge for the electricity market. This difference will be exacerbated with the fast-growing renewable energy penetration to the grid, due to its inherent volatility. Energy storage systems can offer a solution for this demand-generation imbalance, while generating economic benefits through the arbitrage in terms of electricity prices difference. In the present study, a method to estimate the potential revenues of typical energy storage systems is developed. The revenue is considered as the income from the energy storage plant with various roundtrip efficiencies. Thus, an optimal methodology was developed to determine the largest revenue through the charging and discharging operations based on the price profile. It is then applied to the California market in the United States to investigate the potential economic performance of three primary energy storage technologies: Lithium-Ion Batteries, Compressed Air Energy Storage and Pumped Hydro Storage. In particular, the maximum daily revenue from arbitrage is calculated considering various strategies of charging and discharging times as well as the technology’s roundtrip efficiency. The estimated capacity cost of energy storage for different loan periods is also estimated to determine the breakeven cost of the different energy storage technologies for an arbitrage application scenario. Pumped hydro storage (PHS) is found to be the most cost-effective but is not a good candidate for increased capacity in many countries due to concerns associated with developing new dams. Compressed Air Energy Storage (CAES), was found to be the second most cost-effective but still requires much more technology development before it is ready for widespread usage. Lithium battery is well-developed but is currently much too costly (by a factor of four) for a large scale energy storage application. The proposed method can be applied as these and other technologies and their associated costs evolve.
format	article
author	Xinjing Zhang Chao (Chris) Qin Eric Loth Yujie Xu Xuezhi Zhou Haisheng Chen
author_facet	Xinjing Zhang Chao (Chris) Qin Eric Loth Yujie Xu Xuezhi Zhou Haisheng Chen
author_sort	Xinjing Zhang
title	Arbitrage analysis for different energy storage technologies and strategies
title_short	Arbitrage analysis for different energy storage technologies and strategies
title_full	Arbitrage analysis for different energy storage technologies and strategies
title_fullStr	Arbitrage analysis for different energy storage technologies and strategies
title_full_unstemmed	Arbitrage analysis for different energy storage technologies and strategies
title_sort	arbitrage analysis for different energy storage technologies and strategies
publisher	Elsevier
publishDate	2021
url	https://doaj.org/article/0c6eab909e5d48d0a9143d699a40d4b4
work_keys_str_mv	AT xinjingzhang arbitrageanalysisfordifferentenergystoragetechnologiesandstrategies AT chaochrisqin arbitrageanalysisfordifferentenergystoragetechnologiesandstrategies AT ericloth arbitrageanalysisfordifferentenergystoragetechnologiesandstrategies AT yujiexu arbitrageanalysisfordifferentenergystoragetechnologiesandstrategies AT xuezhizhou arbitrageanalysisfordifferentenergystoragetechnologiesandstrategies AT haishengchen arbitrageanalysisfordifferentenergystoragetechnologiesandstrategies
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Arbitrage analysis for different energy storage technologies and strategies

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