A comprehensive review of large-scale energy storage participating in electricity market transactions: Profit model and clearing mechanism

In the context of the double carbon target and the construction of a new type of power system, the power system has been developing rapidly in the direction of new energy sources as the mainstay. Energy storage has a significant role to play in the reliable grid connection and efficient consumption of a high proportion of new energy sources, and can also fundamentally solve the problems of insufficient grid regulation and difficult frequency stability that it brings. Therefore, it is important for the development of energy storage to participate in electricity market transactions and to improve the market transaction mechanism. This paper introduces the domestic and foreign energy storage market trading mechanisms from four aspects: foreign energy storage platform, key issues of energy storage participation in the market, energy storage participation in the electricity market trading mechanism, and energy storage participation in the auxiliary services market trading mechanism, and focuses on the design and example analysis of energy storage participation in the electricity market trading mechanism. The results show that it is not easy for energy storage to participate in the electricity energy trading market, but the revenue in the frequency regulation auxiliary service market is considerable and higher than that in the electricity energy market.

The role of electricity market design for energy storage in cost-efficient decarbonization

Deepening the electric power system reform and building a new power system with new energy as the main body are the top priorities in the development of the energy and power field. The participation of new energy in electricity market transactions is in the early stage of development, and there are many problems in the mechanism design. Aiming at the problem of new energy participating in electricity market transactions, this paper summarizes and analyzes the current situation of new energy participating in the electricity markets at home and abroad, then puts forward the incentive mechanism and price mechanism of new energy participating in electricity market transactions, and finally makes some suggestions about this problem. The research objective is to better promote the participation of new energy in the electricity market, realize the efficient use of new energy, and help to achieve carbon peak and neutrality goals.

This paper aims to meet the challenges of large-scale access to renewable energy and increasingly complex power grid structure, and deeply discusses the application value of energy storage configuration optimization scheme in power grid frequency modulation. Based on the equivalent full cycle model and a large number of actual operation data, various energy storage technologies are technically analyzed, and the economic and environmental performance of different energy storage configuration schemes are comprehensively evaluated. On this basis, this paper puts forward a set of efficient and economical energy storage configuration optimization strategies to meet the demand of power grid frequency modulation and promote the wide application of energy storage technology. After an in-depth analysis, it is found that the optimized energy storage configuration scheme is excellent in technology, economy, and environmental protection. Specifically, in terms of technical performance, the optimization scheme has significantly improved key indicators such as energy storage efficiency, capacity and power, and response speed, which can better meet the requirements of power grid frequency modulation. Through the verification of actual operation data, it is found that the overall efficiency of the optimized energy storage configuration scheme is above 55%, which is helpful to the stability and efficiency of power grid frequency modulation. In terms of economic performance, although the initial investment cost of the optimization scheme may be high, it is found that it has good economy through the evaluation of long-term operation benefits. Considering that the energy storage system can reduce the operating cost of the power grid, improve the energy utilization rate, and achieve the optimization of cost-effectiveness in the long run, this scheme is economically feasible and attractive. In terms of environmental performance, the optimization scheme effectively reduces the negative impact on the environment by improving energy storage efficiency, reducing emissions, and optimizing resource utilization. This is not only conducive to the sustainable development of the power grid but also in line with the current global trend of promoting green and low-carbon transformation. To sum up, this paper not only provides an efficient and economical energy storage allocation optimization strategy for power grid frequency modulation but also provides a scientific basis for relevant decision-making departments. By promoting the practical application and development of energy storage technology, this paper is helpful to improve the frequency modulation ability of power grid, optimize energy structure, and reduce environmental pollution, and thus achieve the goal of sustainable energy development. The data results and in-depth analysis of this paper provide strong support for the practical application of energy storage configuration optimization scheme and also provide important reference for the further innovation and development of energy storage technology.

With the advent of the smart grid and energy Internet era, the scale of new energy generation such as wind energy and photovoltaics is growing rapidly. The power systems in the world are changing from traditional to intelligent, and the application of energy storage technology will become an important part of this transformation. This paper introduces the development status and technical economy of energy storage batteries in power systems, and proposes a comprehensive evaluation method of battery energy storage technology, which comprehensively evaluates the application of energy storage technology in different fields. According to the factors of comprehensive evaluation system and the characteristics of different types of battery energy storage technology, the application of battery energy storage technology in different fields is evaluated comprehensively and relevant suggestions are put forward to provide reference for government authorities and power enterprises.

Recent developments and advances in energy storage technologies are making the application of energy storage technologies a viable solution to power system applications. This paper addresses the economical aspects of Vanadium Redox Battery (VRB) energy storage participation in competitive electricity markets as a power producer. The costs including installation, operation & maintenance and the revenues containing energy price, reducing transmission access cost and deferring facility investment are among economic parameters considered here. In order to achieve this goal, an appropriate self-scheduling approach must be developed to determine its maximum potential of expected profit among multi-markets such as energy and ancillary service markets. The profit maximization problem faced by the VRB is therefore an optimal scheduling problem that is formulated as a mixed-integer non-linear programming (MINLP) problem. Numerical studies have been conducted to evaluate the proposed approach.

Abstract: With the deepening reform of the power system and the gradual improvement of the power market trading mechanism, it provides a new opportunity for the development of energy storage technology, and the energy storage technology presents a good trend of diversified development. The establishment of an auxiliary service compensation mechanism has accelerated the penetration of energy storage systems in the auxiliary service field. The auxiliary service market has become one of the main applications of energy storage technology. This paper investigates the participation mechanism and research status of energy storage technology in auxiliary services, and summarizes the application scenarios and main research directions of energy storage technology in power system auxiliary services. At the same time, combined with the construction of the ubiquitous power Internet of Things, the business model of energy storage technology in China’s auxiliary services market is discussed.

Energy storage will play an essential role in maintaining the power balance of the new power system, which is mainly based on renewable energy sources. Recently, China has been vigorously promoting the development and application of new energy storage and has issued relevant policy documents to promote further the participation of new energy storage in the electricity market. Therefore, it is urgent to establish a market mechanism well adapted to energy storage participation. This paper first investigates the current state of energy storage technology, the situation and the mechanical principle of domestic and foreign energy storage participation in the market. Then the development opportunities and challenges the new energy storage faces are clarified. Finally, based on the development of Jiangxi's electricity market, the mechanism of Jiangxi's independent energy storage participation in various types of electricity markets is designed.

Techno-economic analysis of long-duration energy storage and flexible power generation technologies to support high-variable renewable energy grids

The volatility of electricity price brings huge risks and challenge to the electricity market. Financial derivatives that can be used for risk management and to solve the risks faced by power producers when participating in electricity market transactions. The purpose of this paper is to propose a portfolio strategy of the power producer to earn profits and hedge risks in three electricity markets, namely, the spot market, the ancillary market and the option market. In view of the role of energy storage in storing electricity, the energy storage is considered in this paper to enable power producer to purchase energy storage at a lower price, and then sell electricity at a higher price in the future to earn profits. First of all, this paper establishes the profit models of three markets, respectively. Then, based on the mean-variance portfolio theory, a portfolio strategy for power producer to participate in the three markets are formed. Finally, the numerical simulation is based on the data of the Australian electricity market in 2022. It has been found that the profit obtained by power producer participating in three markets (the spot market, the ancillary market and the option market) using the proposed model is 24.4% higher, while the risk is 36.4% lower comparing with the case that power producer only participates in one market.

Aiming at the grid security problem such as grid frequency, voltage, and power quality fluctuation caused by the large‐scale grid‐connected intermittent new energy, this article investigates the life cycle assessment of energy storage technologies based on the technical characteristics and performance indicators. First, the new power system under dual‐carbon target is reviewed, which is compared with the traditional power system from the generation side, grid side, and user side. Based on the power characteristics of the new power system, the energy storage mechanism and energy storage characteristics of mechanical energy storage, electrochemical energy storage, chemical energy storage, electromagnetic energy storage, and thermal energy storage are described. Then, compared with the existing research strategies, a comprehensive life cycle assessment of energy storage technologies is carried out from four dimensions: technical performance, economic cost, safety assessment, and environmental impact. Moreover, the suitable scenarios and application functions of various energy storage technologies on the power generation side, grid side, and user side are compared and analyzed from the working principle, key technologies, advantages and disadvantages, and technical difficulties of energy storage technologies. Finally, combined with the energy storage technologies in the electricity market, four profit models are analyzed.

Changes in the electricity market under the participation of diverse participants and its supervision necessity analysis

The construction and development of energy storage are crucial areas in the reform of China’s power system. However, one of the key issues hindering energy storage investments is the ambiguity of revenue sources and the inaccurate estimation of returns. In order to facilitate investors’ understanding of revenue sources and returns on investment of energy storage in the existing electricity market, this study has established multiple relevant revenue quantification models. The research methodology employed in this paper consists of three main components: Firstly, we established a revenue model and a cost model for energy storage participation in the electricity market. These models focus on arbitrage revenue, subsidy revenue, auxiliary services revenue, investment cost, operational and maintenance cost, and auxiliary service cost of energy storage. Subsequently, we utilized an enhanced Grey Wolf Optimizer algorithm to solve the optimization problem and maximize revenue, thus obtaining the optimal capacity and revenue scale of energy storage in the electricity market. Finally, we compared the whole-lifecycle ROI of different energy storage options in various scenarios. The evaluation results demonstrate that the difference between peak and off-peak loads impacts the investment demand and charging/discharging depth of energy storage. In addition, the discrepancy between peak and off-peak prices affects the arbitrage return of energy storage. These two factors can serve as criteria for energy storage investors to assess their return expectations. When solely considering economic returns and disregarding technical factors, pumped storage energy storage emerges as the most suitable mechanical energy storage option requiring investment. The main contribution of this study lies in the estimation of the lifecycle investment returns for various energy storage technologies in the Chinese electricity market, thus providing valuable insights for the investment and operational practices of market participants.

Market analysis for the integration of new power technologies: A case study of the deployment of hybrid fossil-based generator plus energy storage (ES-FE)

In January 2017, The Government of Yunnan Province issued the implementation plan of electricity market reform for retail side. The electricity retail market has officially entered the stage of power market in Yunnan Province. The construction of power retail market is conducive to improving the activity of power market, cultivating the market awareness of power users, promoting power users to improve demand side management ability, and ensuring the safe, economic and efficient operation of power system. According to the official website of Kunming Power Exchange Center Company Limited, at present, there are 146 registered power sales companies and 33062 registered power users in Yunnan Province. The power market transactions are active, the transacted electricity quantity is increasing year by year, and the power retail market is booming. The retail package of electricity is the basis of mutual benefit and win-win between the electricity selling company and the retail users. The flexible, reasonable and effective electric retail package reflects the healthy and efficient operation of the electric retail market to a certain extent. Therefore, the research and development of electric power retail package is a very meaningful topic, which is worthy of in-depth study and practice.Firstly, based on the operation of Yunnan electric power wholesale market and electric power retail market, combined with the business practice of Yunnan electric power retail settlement payment, this paper points out the constraint boundary of the design of electric power retail package in electricity market of Yunnan province, such as the coupling constraints between electric power wholesale transaction and retail transaction, the coupling constraints between electric power wholesale settlement and retail settlement, etc. Then, combined with the characteristics of electricity load, electricity price bearing capacity, demand response and other characteristics, this paper makes a user portrait of Yunnan users, classifies and summarizes the power transaction demand of retail users, and designs the corresponding electric power retail package, such as free service, conditional service fee, price difference income, energy management and other electric power packages, which are full through the appropriate electric power retail package. It can meet the demand of electricity retail users and form a win-win situation. Secondly, this paper introduces the operation mode of all kinds of retail packages in Electricity Market of Yunnan province in detail. On the one hand, it is the business process of transaction and settlement, including the wholesale, retail transaction and settlement business process of power selling company, the transaction and settlement business process of power users, the transaction and settlement business organization flow of power exchange center et al. On the other hand, it is the cash flow and invoice flow of settlement and payment, including the cash flow and invoice flow of retail electricity payment of power users. Finally, through the practical analysis of the operation of power retail market in Yunnan province, it points out the advantages and disadvantages of various packages. Further combining with the construction and development plan of electricity market in Yunnan province, especially the operation of electric power spot market, some changes for the design of power retail package are proposed.