Maximising the value of electricity storage
File(s)
Author(s)
Staffell, IL
Rustomji, M
Type
Journal Article
Abstract
Grid-scale energy storage promises to reduce the cost of decarbonising electricity, but is not yet
economically viable. Either costs must fall, or revenue must be extracted from more of the services
that storage provides the electricity system. To help understand the economic prospects for
storage, we review the sources of revenue available and the barriers faced in accessing them. We
then demonstrate a simple algorithm that maximises the profit from storage providing arbitrage
with reserve under both perfect and no foresight, which avoids complex linear programming
techniques. This is made open source and freely available to help promote further research.
We demonstrate that battery systems in the UK could triple their profits by participating in the
reserve market rather than just providing arbitrage. With no foresight of future prices, 75-95% of
the optimal profits are gained. In addition, we model a battery combined with a 322 MW wind farm
to evaluate the benefits of shifting time of delivery. The revenues currently available are not
sufficient to justify the current investment costs for battery technologies, and so further revenue
streams and cost reductions are required.
economically viable. Either costs must fall, or revenue must be extracted from more of the services
that storage provides the electricity system. To help understand the economic prospects for
storage, we review the sources of revenue available and the barriers faced in accessing them. We
then demonstrate a simple algorithm that maximises the profit from storage providing arbitrage
with reserve under both perfect and no foresight, which avoids complex linear programming
techniques. This is made open source and freely available to help promote further research.
We demonstrate that battery systems in the UK could triple their profits by participating in the
reserve market rather than just providing arbitrage. With no foresight of future prices, 75-95% of
the optimal profits are gained. In addition, we model a battery combined with a 322 MW wind farm
to evaluate the benefits of shifting time of delivery. The revenues currently available are not
sufficient to justify the current investment costs for battery technologies, and so further revenue
streams and cost reductions are required.
Date Issued
2016-08-27
Date Acceptance
2016-08-18
Citation
Journal of Energy Storage, 2016, 8, pp.212-225
ISSN
2352-152X
Publisher
Elsevier
Start Page
212
End Page
225
Journal / Book Title
Journal of Energy Storage
Volume
8
Copyright Statement
© 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
License URL
Publication Status
Published