Economic Viability of Battery Energy Storage for the Provision of Frequency Regulation Service
Abstract
Battery Energy Storage Systems (BESS) can provide a number of services to the power grid, with various financial potentials.This paper examines the economic viability of BESS providing primary frequency regulation (PFR) services in Europeanmarkets. The current status of frequency regulation markets of mainland UK (Great Britain) and Central Europe was investigatedand a techno-econometric model was developed to examine the economic viability and profitability of each marketcase. The results show a positive Net Present Value (NPV) for all the examined markets and a high internal rate of return(IRR). The impact of the most influential parameters such as service price and initial capital cost has been examined andanalysed. This analysis seeks to inform interested parties about the viability of BESS services and to provide guidelines forfuture development.References
[1] G. Fitzgerald, J. Mandel, J. Morris, H. Touati, The economics of battery
energy storage: How multi-use, customer-sited batteries deliver the
most services and value to customers and the grid, Rocky Mountain
Institute.
Figure 3: NPV at years 5, 10 and 15 as a function of initial CAPEX of the
system
[2] C. Pieper, H. Rubel, Revisiting energy storage: there is a business
case, The Boston Consulting Group (02).
[3] V. Pandurangan, H. Zareipour, O. Malik, Frequency regulation services:
A comparative study of select north american and european reserve
markets, in: North American Power Symposium (NAPS), 2012,
IEEE, 2012, pp. 1–8.
[4] D. Greenwood, K. Y. Lim, C. Patsios, P. Lyons, Y. S. Lim, P. Taylor, Frequency
response services designed for energy storage, Applied Energy
203 (2017) 115–127.
[5] U. Energy, Ancillary services report 2017, Available online
at:[Accessed 22 July 2017].
[6] E. Ares, G. Grimwood, Energy Storage in the UK, House Commons
Libr., no. 07621, p.32, 2016.
[7] “enhanced frequency response (efr) national grid uk.” [online].
available: https://www.nationalgrid.com/uk/electricity/balancingservices/
frequency-response-services/enhanced-frequencyresponse-
efr.
[8] “regelleistung.net internetplattform zur vergabe von regelleistung.” [online].
available: https://www.regelleistung.net/ext/tender/?lang=en. [accessed:
20-feb-2018].
[9] “net present value - npv,” 2017. [online]. available:
http://www.investopedia.com/terms/n/npv.asp. [accessed: 21-oct-
2017].
[10] C. yianni, m. florides, s. afxentis, v. efthymiou, and g. e. georghiou,
“economic viability of battery energy storage system applications,”
2018 ieee int. energy conf. energycon 2018, pp. 1–6, 2018.
[11] F. Cell, H. J. Undertaking, Commercialisation of energy storage in europe,
Final Report (2015) 52.
[12] Lazard, “lazard’s levelised cost of storage v3.0,” november 2017.
[13] “energy storage & battery technology,” no. march, pp. 1–5, 2017, sandbag.
[14] B. Lee, M. Lapides, P. Archambault, I. Matsubashi, R. Koort,
M. Sugiyama, The great battery race framing the next frontier in clean
technology-electrical energy storage, Goldman Sachs.
[15] I. Pawel, The cost of storage–how to calculate the levelized cost of
stored energy (lcoe) and applications to renewable energy generation,
Energy Procedia 46 (2014) 68–77.
[16] J. Neubauer, M. Simpson, Deployment of behind-the-meter energy
storage for demand charge reduction, National Renewable Energy
Laboratory Golden, CO, 2015.
energy storage: How multi-use, customer-sited batteries deliver the
most services and value to customers and the grid, Rocky Mountain
Institute.
Figure 3: NPV at years 5, 10 and 15 as a function of initial CAPEX of the
system
[2] C. Pieper, H. Rubel, Revisiting energy storage: there is a business
case, The Boston Consulting Group (02).
[3] V. Pandurangan, H. Zareipour, O. Malik, Frequency regulation services:
A comparative study of select north american and european reserve
markets, in: North American Power Symposium (NAPS), 2012,
IEEE, 2012, pp. 1–8.
[4] D. Greenwood, K. Y. Lim, C. Patsios, P. Lyons, Y. S. Lim, P. Taylor, Frequency
response services designed for energy storage, Applied Energy
203 (2017) 115–127.
[5] U. Energy, Ancillary services report 2017, Available online
at:[Accessed 22 July 2017].
[6] E. Ares, G. Grimwood, Energy Storage in the UK, House Commons
Libr., no. 07621, p.32, 2016.
[7] “enhanced frequency response (efr) national grid uk.” [online].
available: https://www.nationalgrid.com/uk/electricity/balancingservices/
frequency-response-services/enhanced-frequencyresponse-
efr.
[8] “regelleistung.net internetplattform zur vergabe von regelleistung.” [online].
available: https://www.regelleistung.net/ext/tender/?lang=en. [accessed:
20-feb-2018].
[9] “net present value - npv,” 2017. [online]. available:
http://www.investopedia.com/terms/n/npv.asp. [accessed: 21-oct-
2017].
[10] C. yianni, m. florides, s. afxentis, v. efthymiou, and g. e. georghiou,
“economic viability of battery energy storage system applications,”
2018 ieee int. energy conf. energycon 2018, pp. 1–6, 2018.
[11] F. Cell, H. J. Undertaking, Commercialisation of energy storage in europe,
Final Report (2015) 52.
[12] Lazard, “lazard’s levelised cost of storage v3.0,” november 2017.
[13] “energy storage & battery technology,” no. march, pp. 1–5, 2017, sandbag.
[14] B. Lee, M. Lapides, P. Archambault, I. Matsubashi, R. Koort,
M. Sugiyama, The great battery race framing the next frontier in clean
technology-electrical energy storage, Goldman Sachs.
[15] I. Pawel, The cost of storage–how to calculate the levelized cost of
stored energy (lcoe) and applications to renewable energy generation,
Energy Procedia 46 (2014) 68–77.
[16] J. Neubauer, M. Simpson, Deployment of behind-the-meter energy
storage for demand charge reduction, National Renewable Energy
Laboratory Golden, CO, 2015.
Published
2019-02-01
How to Cite
YIANNI, Christos; EFTHYMIOU, Venizelos; GEORGHIOU, George E..
Economic Viability of Battery Energy Storage for the Provision of Frequency Regulation Service.
Journal of Power Technologies, [S.l.], v. 98, n. 5, p. 403–407, feb. 2019.
ISSN 2083-4195.
Available at: <https://papers.itc.pw.edu.pl/index.php/JPT/article/view/1469>. Date accessed: 21 dec. 2024.
Issue
Section
RENEWABLE ENERGY SOURCES & ENERGY EFFICIENCY 2018 Cyprus
Keywords
battery energy storage, primary frequency regulation, economic viability
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
