Assessing the benefits and economics of bulk energy storage technologies in the power grid

This paper presents a generic bulk energy storage dispatch model for production costing simulation, and assesses the performance and economics of storage under various system scenarios. The storage model presented captures the dynamic relationship between the reservoir energy status and the storage commitments in energy and ancillary co-optimization market, thereby enabling the dispatch of storage for both energy and cross-market arbitrage opportunities. The paper also presents a methodology to quantify the cycling costs incurred by conventional generating units due to frequent start-shut cycles and ancillary services. The bulk storage technology modeled is compressed air energy storage (CAES), and it is represented within the IEEE 24 bus reliability test system. Simulations are performed to quantify the impacts of bulk energy storage in terms of reduction in market prices, system production and cycling costs, and also to investigate the economic viability of storage projects in terms of payback periods under increasing wind penetration levels.