Exploring the economics of large scale lithium ion and lead acid batteries performing frequency response

Abstract

Provision of ancillary services is one of the key sources of revenue for energy storage. Hence, in order to understand the economic viability of a given technology it is important to assess its potential profitability and performance through provision of such services. Firm Frequency Response (FFR) is a type of ancillary service used for balancing grid frequency; this work uses grid frequency data to determine the real-time usage of lithium ion and lead acid batteries providing FFR. Battery capacity is balanced in real-time using several different proposed strategies; degradation and lifetime are then calculated, along with Net Present Value (NPV) for the different battery types, to ascertain their profitability. Lead acid batteries are found to not be worthwhile investments for this usage. On the other hand, lithium ion batteries are found to be suitable. In particular, battery chemistries providing high power density are economically preferable to those with high energy densities. It is found that the highest NPV (of the order £105) can be achieved when the batteries are used in a way that reduces degradation and increases lifetime; practically, this equates to a high level of capacity balancing in order to maintain battery capacity close to its mid-point, even if this is more costly in the short-term.