Uses, Cost-Benefit Analysis, and Markets of Energy Storage Systems for Electric Grid Applications

Energy storage systems (ESS) are increasingly deployed in both transmission and distribution grids for various benefits, especially for improving renewable energy penetration. Along with the industrial acceptance of ESS, research on storage technologies and their grid applications is also undergoing rapid progress. We present an overview of ESS including different storage technologies, various grid applications, cost-benefit analysis, and market policies. First, we classify storage technologies with grid application potential into several groups according to the form of energy stored. This classification is presented to summarize technological and economic characteristics of storage technologies and also present the recent development of these technologies. Next, we categorize the grid applications of ESS into several groups based on the physical location, service type, and working principle. We also review the state-of-the-art optimization and control methodologies for each application group. Furthermore, we present the cost-benefit analysis for three types of investors and a comprehensive comparison among market policies for the participation of ESS in different wholesale markets. Finally, we highlight several future research directions that are derived from this review. To improve the performance and profitability of ESS for electric grid applications, future research should have a focus on developing decision making tools for determining the storage technology, installed capacity, and operating strategy. This research focus should be supported by the further developments of component-level performance and aging models, system-level market frameworks, and cost-benefit analysis.