Impacts of Distributed Generation with Energy Storage on the Power Grid- Economics and Costs

Abstract

This paper discusses the impact on net present cost and levelized cost of energy of integrating battery energy storage system (BESS) to the grid, with the Ubin microgrid used as a case study. The Ubin microgrid is not connect to the Singapore’s main grid, utilizes distributed generation such as Solar PV and diesel gensets to meet load demand and has a 960kWh lead acid BESS. Using the simulation software HOMER, it was found that the cost effectiveness of BESS was sensitive to diesel prices. A microgrid without BESS was found to be more cost effective at current diesel pump prices. However, with a 20% increase in diesel price, the existing microgrid (Solar-Diesel-BESS) had a lower net present cost and levelized cost of energy. Furthermore, the battery serves other purposes, such as supplying peak loads and providing backup power in the case of generator downtimes. The existing lead acid BESS was then compared to lithium-ion and vanadium redox flow technologies. It was found that vanadium redox flow BESS was the cheapest option of the three and while lithium-ion was the most expensive option.