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

Drury, Easan; Denholm, Paul; Sioshansi, Ramteen

doi:10.1016/j.energy.2011.05.041

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

Journal Article · Tue Jun 28 00:00:00 EDT 2011 · Energy

DOI:https://doi.org/10.1016/j.energy.2011.05.041· OSTI ID:1353383

Drury, Easan ^[1]; Denholm, Paul ^[1]; Sioshansi, Ramteen ^[2]

National Renewable Energy Lab. (NREL), Golden, CO (United States)
The Ohio State Univ., Columbus, OH (United States)

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.

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Research Organization:: National Renewable Energy Laboratory (NREL), Golden, CO (United States)

Sponsoring Organization:: USDOE Office of Energy Efficiency and Renewable Energy (EERE)

Grant/Contract Number:: AC36-08GO28308

OSTI ID:: 1353383

Journal Information:: Energy, Vol. 36, Issue 8; ISSN 0360-5442

Publisher:: ElsevierCopyright Statement

Country of Publication:: United States

Language:: English

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Cited by: 162 works

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References (9)

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The role of energy storage in deep decarbonization of electricity production Arbabzadeh, Maryam; Sioshansi, Ramteen; Johnson, Jeremiah X. Nature Communications, Vol. 10, Issue 1 https://doi.org/10.1038/s41467-019-11161-5	journal	July 2019
Storage and demand-side options for integrating wind power: Demand side and storage options for integrating wind power Tuohy, Aidan; Kaun, Ben; Entriken, Robert Wiley Interdisciplinary Reviews: Energy and Environment, Vol. 3, Issue 1 https://doi.org/10.1002/wene.92	journal	October 2013
Simultaneous co-integration of multiple electrical storage applications in a consumer setting Metz, Dennis; Saraiva, João Tomé Energy, Vol. 143 https://doi.org/10.1016/j.energy.2017.10.098	journal	January 2018
Technico-economical analysis of a hybrid wave power-air compression storage system Hernández-Torres, David; Bridier, Laurent; David, Mathieu Renewable Energy, Vol. 74 https://doi.org/10.1016/j.renene.2014.08.070	journal	February 2015
Control of Battery Storage Systems for the Simultaneous Provision of Multiple Services Namor, Emil; Sossan, Fabrizio; Cherkaoui, Rachid IEEE Transactions on Smart Grid, Vol. 10, Issue 3 https://doi.org/10.1109/tsg.2018.2810781	journal	May 2019
Performance Analysis of a Coal-Fired External Combustion Compressed Air Energy Storage System Liu, Wenyi; Li, Qing; Liang, Feifei Entropy, Vol. 16, Issue 11 https://doi.org/10.3390/e16115935	journal	November 2014
A Novel Pumped Hydro Combined with Compressed Air Energy Storage System Wang, Huanran; Wang, Liqin; Wang, Xinbing Energies, Vol. 6, Issue 3 https://doi.org/10.3390/en6031554	journal	March 2013
Economic Modeling of Compressed Air Energy Storage Gu, Yang; McCalley, James; Ni, Ming Energies, Vol. 6, Issue 4 https://doi.org/10.3390/en6042221	journal	April 2013
How much energy storage do modern power systems need? Preskill, Autumn; Callaway, Duncan arXiv https://doi.org/10.48550/arxiv.1805.05115	preprint	January 2018
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