Abstract
This study explores and quantifies the social costs and benefits of grid-scale electrical energy storage (EES) projects in Great Britain. The case study for this paper is the Smarter Network Storage project, a 6 MW/10 MWh lithium battery placed at the Leighton Buzzard Primary substation to meet growing local peak demand requirements. This study analyses both the locational and system-wide benefits to grid-scale EES, determines the realistic combination of those social benefits, and juxtaposes them against the social costs across the useful lifecycle of the battery to determine the techno-economic performance. Risk and uncertainty from the benefit streams, cost elements, battery lifespan, and discount rate are incorporated into a Monte Carlo simulation. Using this framework, society can be guided to cost-effectively invest in EES as a grid modernization asset to facilitate the transition to a reliable, affordable, and clean power system.
Highlights
Electrical energy storage (EES) can support the transition toward a low-carbon economy by helping to integrate higher levels of variable renewable resources, by allowing for a more resilient, reliable, and flexible electricity grid and promoting greater production of energy where it is consumed, among others [1]
The case study for this paper is the Smarter Network Storage project, a 6 MW/10 MWh lithium battery placed at the Leighton Buzzard Primary substation to meet growing local peak demand requirements
The social cost benefit analysis provides a strong framework to assess whether the regulatory regime should encourage more investment in grid-scale EES
Summary
Electrical energy storage (EES) can support the transition toward a low-carbon economy (decarbonisation) by helping to integrate higher levels of variable renewable resources, by allowing for a more resilient, reliable, and flexible electricity grid and promoting greater production of energy where it is consumed, among others [1]. Gunter and Marinopoulus [21], estimate and evaluate the contribution of grid connected EES to frequency regulation and peak limiting (for demand charge reduction) in the eastern United States (PJM served area) and California (CAISO served area) Results from their cost benefit analysis (CBA) and sensitivity analysis suggest that EES deployment is economically viable even with market structures less beneficial than the current ones. Rather than modelling EES from a business case perspective or in a future-state of the power system dominated by renewables and distributed generation, this study uniquely evaluates a specific energy storage project from society’s perspective (social welfare) in order to cost-effectively guide investment in EES projects and discuss policy implications and electricity market reforms for achieving a low carbon network. Section seven lays out the conclusion and offers insights into policy recommendations for enhancing the value of EES through electricity market reforms
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