Cost–Benefit Analysis of Energy Storage in Distribution Networks

Yu Ji, Xiaogang Hou, Lingfeng Kou, Ming Wu, Ying Zhang, Xiong Xiong, Baodi Ding, Ping Xue, Junlong Li and Yue Xiang
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Yu Ji: China Electric Power Research Institute, Beijing 100192, China
Xiaogang Hou: China Electric Power Research Institute, Beijing 100192, China
Lingfeng Kou: China Electric Power Research Institute, Beijing 100192, China
Ming Wu: China Electric Power Research Institute, Beijing 100192, China
Ying Zhang: China Electric Power Research Institute, Beijing 100192, China
Xiong Xiong: China Electric Power Research Institute, Beijing 100192, China
Baodi Ding: China Electric Power Research Institute, Beijing 100192, China
Ping Xue: College of Electrical Engineering, Sichuan University, Chengdu 610065, China
Junlong Li: College of Electrical Engineering, Sichuan University, Chengdu 610065, China
Yue Xiang: College of Electrical Engineering, Sichuan University, Chengdu 610065, China

Energies, 2019, vol. 12, issue 17, 1-23

Abstract: Due to the challenges posed to power systems because of the variability and uncertainty in clean energy, the integration of energy storage devices (ESD) has provided a rigorous approach to improve network stability in recent years. Moreover, with the rapid development of the electricity market, an ESD operation strategy, which can maximize the benefits of ESD owners as well as the contribution to the electricity network stability, plays an important role in the marketization of ESDs. Although the benefits for ESD owners are discussed in many studies, the economic impact of ESD operation on distribution networks has not been commendably taken into account. Therefore, a cost–benefit analysis method of ESD which quantifies the economic impact of ESD operation on distribution networks is proposed in this paper. Considering the time-of-use (TOU) price and load demand, the arbitrage of ESD is realized through a strategy with low price charging and high price discharging. Then, the auxiliary service of ESD is realized by its capability of peak shaving and valley filling. In this paper, the long-run incremental cost (LRIC) method is adopted to calculate the network price based on the congestion cost. Based on the dynamic cost–benefit analysis method, the cost–benefit marginal analysis model in the ESD life cycle is proposed through the calculation of the present value of benefit. Subsequently, the optimal ESD capacity and charge/discharge rate is obtained to get the shortest payback period by analyzing different operation parameters. Finally, a case study is undertaken, where the ESD operation model mentioned above is simulated on a two-bus system and a 33-bus system, and the ESD cost–benefit analysis and the analysis of corresponding influence factors are carried out adequately.

Keywords: energy storage device (ESD); cost–benefit analysis; long-run incremental cost method; payback period (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
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