An economic analysis model for the energy storage system applied to a distribution substation

Recent developments and advances in energy storage technologies are making the application of energy storage technologies a viable solution to power applications. The energy storage system can store energy previously, and then release it in the proper time. Due to their flexibility, it is suitable to apply this technology to deregulated power markets. Therefore, this paper will build the economic analysis model for the energy storage system to apply to a distribution substation in a deregulated power market. The costs including installing energy storage system and operation and maintenance expense, and the revenues containing energy price arbitrage, reducing transmission access cost, and deferring facility investment are considered in this model. All these factors are evaluated by present worth value. Due to complexity of this problem, this paper proposes a method combining the genetic algorithm with linear program (GALP) to determine the optimal capacity and operations of the energy storage system.

► This paper builds the economic analysis model for the energy storage system.
► Revenues are price arbitrage, reducing transmission access, and deferring investment.
► Costs contain installing and operation & maintenance expenses.
► This study determines the optimal capacity and operation of the energy storage system.