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Title: The value of compressed air energy storage in energy and reserve markets

Abstract

Storage devices can provide several grid services, however it is challenging to quantify the value of providing several services and to optimally allocate storage resources to maximize value. We develop a co-optimized Compressed Air Energy Storage (CAES) dispatch model to characterize the value of providing operating reserves in addition to energy arbitrage in several U.S. markets. We use the model to: (1) quantify the added value of providing operating reserves in addition to energy arbitrage; (2) evaluate the dynamic nature of optimally allocating storage resources into energy and reserve markets; and (3) quantify the sensitivity of CAES net revenues to several design and performance parameters. We find that conventional CAES systems could earn an additional 23 ± 10/kW-yr by providing operating reserves, and adiabatic CAES systems could earn an additional 28 ± 13/kW-yr. We find that arbitrage-only revenues are unlikely to support a CAES investment in most market locations, but the addition of reserve revenues could support a conventional CAES investment in several markets. Adiabatic CAES revenues are not likely to support an investment in most regions studied. As a result, modifying CAES design and performance parameters primarily impacts arbitrage revenues, and optimizing CAES design will be nearly independent ofmore » dispatch strategy.« less

Authors:
 [1];  [1];  [2]
  1. National Renewable Energy Lab. (NREL), Golden, CO (United States)
  2. The Ohio State Univ., Columbus, OH (United States)
Publication Date:
Research Org.:
National Renewable Energy Lab. (NREL), Golden, CO (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE)
OSTI Identifier:
1353383
Grant/Contract Number:  
AC36-08GO28308
Resource Type:
Journal Article: Accepted Manuscript
Journal Name:
Energy (Oxford)
Additional Journal Information:
Journal Volume: 36; Journal Issue: 8; Journal ID: ISSN 0360-5442
Publisher:
Elsevier
Country of Publication:
United States
Language:
English
Subject:
25 ENERGY STORAGE; 29 ENERGY PLANNING, POLICY, AND ECONOMY; energy storage; arbitrage; operating reserves; CAES; investment decisions

Citation Formats

Drury, Easan, Denholm, Paul, and Sioshansi, Ramteen. The value of compressed air energy storage in energy and reserve markets. United States: N. p., 2011. Web. doi:10.1016/j.energy.2011.05.041.
Drury, Easan, Denholm, Paul, & Sioshansi, Ramteen. The value of compressed air energy storage in energy and reserve markets. United States. doi:10.1016/j.energy.2011.05.041.
Drury, Easan, Denholm, Paul, and Sioshansi, Ramteen. Tue . "The value of compressed air energy storage in energy and reserve markets". United States. doi:10.1016/j.energy.2011.05.041. https://www.osti.gov/servlets/purl/1353383.
@article{osti_1353383,
title = {The value of compressed air energy storage in energy and reserve markets},
author = {Drury, Easan and Denholm, Paul and Sioshansi, Ramteen},
abstractNote = {Storage devices can provide several grid services, however it is challenging to quantify the value of providing several services and to optimally allocate storage resources to maximize value. We develop a co-optimized Compressed Air Energy Storage (CAES) dispatch model to characterize the value of providing operating reserves in addition to energy arbitrage in several U.S. markets. We use the model to: (1) quantify the added value of providing operating reserves in addition to energy arbitrage; (2) evaluate the dynamic nature of optimally allocating storage resources into energy and reserve markets; and (3) quantify the sensitivity of CAES net revenues to several design and performance parameters. We find that conventional CAES systems could earn an additional 23 ± 10/kW-yr by providing operating reserves, and adiabatic CAES systems could earn an additional 28 ± 13/kW-yr. We find that arbitrage-only revenues are unlikely to support a CAES investment in most market locations, but the addition of reserve revenues could support a conventional CAES investment in several markets. Adiabatic CAES revenues are not likely to support an investment in most regions studied. As a result, modifying CAES design and performance parameters primarily impacts arbitrage revenues, and optimizing CAES design will be nearly independent of dispatch strategy.},
doi = {10.1016/j.energy.2011.05.041},
journal = {Energy (Oxford)},
issn = {0360-5442},
number = 8,
volume = 36,
place = {United States},
year = {2011},
month = {6}
}

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