Abstract
Energy storage has attracted more and more attention for its advantages in ensuring system safety and improving renewable generation integration. In the context of China’s electricity market restructuring, the economic analysis, including the cost and benefit analysis, of the energy storage with multi-applications is urgent for the market policy design in China. This paper uses an income statement based on the energy storage cost–benefit model to analyze the economic benefits of energy storage under multi-application scenarios (capacity, energy, and frequency regulation markets) in China’s future electricity market. The results show that the economic benefits of energy storage can be improved by joining in the capacity market (if it exists in the future) and increasing participation in the frequency regulation market. Nevertheless, the benefits under multi-application scenarios can hardly guarantee the cost recovery of energy storage under the current market mechanism or at the current price levels. Moreover, the economic benefits under different subsidy policies are studied, and the results show that energy storage can recover the cost with appropriate subsidy policies (the subsidy of 0.071 USD/kWh for pumped storage power stations is sufficient while the subsidy of 0.142 USD/kWh is required for electrochemical power stations). Finally, the sensitivity analysis of an energy storage power station to different price levels is carried out considering the difference in electricity price between China and the United States.
Highlights
Traditional coal resources produce a large amount of atmospheric carbon dioxide in the combustion process, which has adverse effects on climate change [1] and leads to a transformation of traditional energy structure
We establish a cost–benefit model under multi-application scenarios, which takes the simultaneous participation of energy storage in the three sub-markets into account, and uses the income statement based on the proposed model to analyze the economic benefits of energy storage
The above two kinds of energy storage technologies are selected as examples to calculate the cost and economic benefits of energy storage in China’s future electricity market, and the main contributions are as follows: (1) This paper proposes a cost–benefit model under multi-application scenarios based on the different mechanisms of energy market, capacity market, and frequency regulation market
Summary
Traditional coal resources produce a large amount of atmospheric carbon dioxide in the combustion process, which has adverse effects on climate change [1] and leads to a transformation of traditional energy structure. The authors of [27] analyze the economic situation of energy storage in three main application scenarios (bulk energy storage, T&D support service, frequency regulation), but it is not connected with the electricity market. We establish a cost–benefit model under multi-application scenarios, which takes the simultaneous participation of energy storage in the three sub-markets (energy market, capacity market, and frequency regulation market) into account, and uses the income statement based on the proposed model to analyze the economic benefits of energy storage. (2) This paper applies the proposed cost–benefit model to the income statement and selects two typical power stations to analyze the cost and economic benefits of energy storage under multi-application scenarios (capacity, energy, and frequency regulation markets) in China’s future. The two selected power stations are Yixing Pumped Storage Power Station and Zhenjiang Electrochemical Power Station. (3) This paper compares the profits of energy storage under different market participations and subsidy policies, in consideration of the power stations’ independent choice of markets and strong government support for the development of energy storage. (4) This paper analyzes the sensitivity of energy storage power stations to different price levels, considering the difference of price between China’s electricity market and the Pennsylvania-New Jersey-Maryland (PJM) market
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
