Profitability, risk, and financial modeling of energy storage in residential and large scale applications

Asmae Berrada, Khalid Loudiyi and Izeddine Zorkani

Energy, 2017, vol. 119, issue C, 94-109

Abstract: The increasing share of renewable energy plants in the power industry portfolio is causing grid instability issues. Energy storage technologies have the ability to revolutionize the way in which the electrical grid is operated. The incorporation of energy storage systems in the grid help reduce this instability by shifting power produced during low energy consumption to peak demand hours and hence balancing energy generation with demand. However, the deployment of some energy storage systems will remain limited until their economic profitability is proven. In this paper, a cost-benefit analysis is performed to determine the economic viability of energy storage used in residential and large scale applications. Revenues from energy arbitrage were identified using the proposed models to get a better view on the profitability of the storage system. Moreover, the feasibility of energy storage projects relies on the readiness of investors to invest in the project. This willingness is significantly affected by several factors such as the risk of the innovative storage concept. To analyse the profitability risk associated with such energy project, a sensitivity analysis is performed in this study.

Keywords: Economic viability; Optimal modeling; Energy storage; Risk analysis; Sensitivity assessment (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544216318722
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:119:y:2017:i:c:p:94-109

DOI: 10.1016/j.energy.2016.12.066

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().