A methodological approach for assessing the value of energy storage in the power system operation by mid-term simulation

This paper presents a novel methodological approach to assess the operational value of energy storage by midterm simulation considering the co-optimization of energy and reserves provision in the day-ahead electricity market (DAM) framework. A 0/1 mixed integer linear formulation of the traditional Unit Commitment (UC) problem from the Transmission System Operator (TSO) perspective is utilized, allowing for the realistic and accurate modeling of both conventional and storage units' operating phases and conditions. Multiple thermal units' availability scenarios are generated and combined with different climatic conditions (load demand, RES and hydro generation) to formulate a large number of simulation scenarios. Parallel High-Performance Computing (HPC) infrastructure has been employed for the efficient execution of the computationally intensive simulation runs. The proposed optimization model has been tested in the future Greek mainland power system (year 2025) in accordance with the provisions of the approved Greek National Energy and Climate Plan and the most recent Greek TSO Adequacy Study. Simulation results illustrate that the addition of up to 780 MW of new closed-loop energy storage units can lead to higher DAM clearing prices (up to +2.1%), lower conventional thermal units cycling (up to-39.7%) and lower RES curtailment volumes (up to-93.5%) for the base case scenarios. Additionally, the increasing closed-loop energy storage capacity up to 780 MW affects negatively its system and market value, which decrease from 27.4 keuro/MW to 16.0 keuro/MW (system value) and from 16.5 keuro/ MW to 4.4 keuro/MW (market value), respectively. Sensitivity analysis on the forecasted RES penetration level demonstrated that the operation of up to 3,000 MW of additional wind and PV plants can increase energy storage system value by 86-136% and market value by 184-320% with respect to the base case, thus indicating that the higher the RES penetration is, the higher the value of energy storage.

Automated summary

This paper presents a new methodological approach to assess the operational value of energy storage by midterm simulation considering the co-optimization of energy and reserves provision. Simulation results show that the addition of closed-loop energy storage units can lead to higher DAM clearing prices, lower conventional thermal units cycling, and lower RES curtailment volumes.