Abstract
Many countries have the ambition to increase the share of renewable sources in electricity generation. However, continuously varying renewable sources, such as wind power or solar energy, require that the power system can manage the variability and uncertainty of the power generation. One solution to increase flexibility of the system is to use various forms of energy storage, which can provide flexibility to the system at different time ranges and smooth the effect of variability of the renewable generation. In this paper, we investigate three questions connected to investment planning of energy storage systems. First, how the existing flexibility in the system will affect the need for energy storage investments. Second, how presence of energy storage will affect renewable generation expansion and affect electricity prices. Third, who should be responsible for energy storage investments planning. This paper proposes to assess these questions through two different mathematical models. The first model is designed for centralized investment planning and the second model deals with a decentralized investment approach where a single independent profit maximizing utility is responsible for energy storage investments. The models have been applied in various case studies with different generation mixes and flexibility levels. The results show that energy storage system is beneficial for power system operation. However, additional regulation should be considered to achieve optimal investment and allocation of energy storage.
Highlights
90 MW of energy storage consisting of batteries were installed compared to 115 MW of storage capacity consisting of compressed air energy storage (CAES) and a batteries under centralized planning
Energy storage investments reduced substantially installed capacity of the wind power generation which was required by renewable generation target set by the system
This paper presents two mathematical models for centralized and decentralized investment planning of energy storage and wind power generation expansion
Summary
The increasing interest in variable renewable generation such as wind-based generation raises concerns on the need to increase the flexibility of the systems to accommodate large scale varying renewable energy sources. Current percentage of wind-based electricity generation in the European generation mix is even greater than hydro based electricity generation which is 15.5% Such a share of variable wind energy is still considered relatively low. The current state of a flexibility of the majority European power systems is proved to be sufficient to handle variability and uncertainty of the present wind based generation. Based on current European targets, 20% consumption of energy should come from renewable generation by the year 2020. The target has been set by 2020 Climate and Energy package and will require even higher installed capacity of renewable generation due to variability and uncertainty of the renewable sources. Additional flexibility will be required [2,3]
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