Multi-service based economic valuation of grid-connected battery energy storage systems

Abstract

Grid-scale Battery Energy Storage (BES) technologies are advocated as key enablers for low-carbon pathways. High capital costs and limited revenue from capacity utilization for a specific service leave most of the storage assets under high investment risks. Economic viability of BES can be justified from their participation in multiple services. Most of the existing works on value stacking and economic viability assessment are limited to considering energy arbitrage, peak shaving, and frequency regulation. Non-consideration of other potential grid services like load following and ramp products results in inadequate economic feasibility assessment of storage projects. In this context, the paper attempts to analyze economic feasibility from stacked revenues of an optimally sized BES. Various combinations of six grid services - energy arbitrage, regulation, reserve, load following, peak shaving, and ramp products; are modeled to assess optimal portfolio of services for BES value stacking and economic viability. BES and conventional units are co-optimized for various services in hourly resolution and inter-day rolling horizon for a year using security-constrained scheduling framework. Economic analysis of BES is carried out using cash flows for various service combinations. Case studies conducted on IEEE RTS 24 and Great Britain test systems highlight that BES, with stacked services, can gain 80%–120% of the sum of individual revenues. BES investments are found to be economically viable with value stacking from 04 to 05 services.