Energy Storage Economic Analysis of Multi-Application Scenarios in an Electricity Market: A Case Study of China

Energy storage has attracted more and more attention for its advantages in ensuring system safety and improving renewable generation integration. In the context of China’s electricity market restructuring, the economic analysis, including the cost and benefit analysis, of the energy storage with mul...

Full description

Saved in:
Bibliographic Details
Published inSustainability Vol. 12; no. 20; p. 8703
Main Authors Wang, Zhixian, Wang, Ying, Ding, Qia, Wang, Chen, Zhang, Kaifeng
Format Journal Article
LanguageEnglish
Published Basel MDPI AG 20.10.2020
Subjects
Alternative energy sources
Arbitrage
Compressed air
Costs
Economic analysis
Economic models
Electric power distribution
Electricity
Electricity distribution
Electricity pricing
Electrochemistry
Energy recovery
Energy storage
Externality
Power plants
Pumped storage
Renewable resources
Sensitivity analysis
Sustainability
China
Online AccessGet full text

Cover

More Information
Summary:Energy storage has attracted more and more attention for its advantages in ensuring system safety and improving renewable generation integration. In the context of China’s electricity market restructuring, the economic analysis, including the cost and benefit analysis, of the energy storage with multi-applications is urgent for the market policy design in China. This paper uses an income statement based on the energy storage cost–benefit model to analyze the economic benefits of energy storage under multi-application scenarios (capacity, energy, and frequency regulation markets) in China’s future electricity market. The results show that the economic benefits of energy storage can be improved by joining in the capacity market (if it exists in the future) and increasing participation in the frequency regulation market. Nevertheless, the benefits under multi-application scenarios can hardly guarantee the cost recovery of energy storage under the current market mechanism or at the current price levels. Moreover, the economic benefits under different subsidy policies are studied, and the results show that energy storage can recover the cost with appropriate subsidy policies (the subsidy of 0.071 USD/kWh for pumped storage power stations is sufficient while the subsidy of 0.142 USD/kWh is required for electrochemical power stations). Finally, the sensitivity analysis of an energy storage power station to different price levels is carried out considering the difference in electricity price between China and the United States.
ISSN:2071-1050
2071-1050
DOI:10.3390/su12208703