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Can a wind farm with CAES survive in the day-ahead market?

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  • Mauch, Brandon
  • Carvalho, Pedro M.S.
  • Apt, Jay

Abstract

We investigate the economic viability of coupling a wind farm with compressed air energy storage (CAES) to participate in the day-ahead electricity market at a time when renewable portfolio standards are not binding and wind competes freely in the marketplace. In our model, the CAES is used to reduce the risk of committing uncertain quantities of wind energy and to shift dispatch of wind generation to high price periods. Other sources of revenue (capacity markets, ancillary services, price arbitrage) are not included in the analysis. We present a model to calculate profit maximizing day-ahead dispatch schedules based on wind forecasts. Annual profits are determined with dispatch schedules and actual wind generation values.

Suggested Citation

  • Mauch, Brandon & Carvalho, Pedro M.S. & Apt, Jay, 2012. "Can a wind farm with CAES survive in the day-ahead market?," Energy Policy, Elsevier, vol. 48(C), pages 584-593.
    • Handle: RePEc:eee:enepol:v:48:y:2012:i:c:p:584-593
    DOI: 10.1016/j.enpol.2012.05.061
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    References listed on IDEAS

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    1. Fertig, Emily & Apt, Jay, 2011. "Economics of compressed air energy storage to integrate wind power: A case study in ERCOT," Energy Policy, Elsevier, vol. 39(5), pages 2330-2342, May.
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    3. Spees, Kathleen & Lave, Lester B., 2007. "Demand Response and Electricity Market Efficiency," The Electricity Journal, Elsevier, vol. 20(3), pages 69-85, April.
    4. Denholm, Paul & Sioshansi, Ramteen, 2009. "The value of compressed air energy storage with wind in transmission-constrained electric power systems," Energy Policy, Elsevier, vol. 37(8), pages 3149-3158, August.
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    Cited by:

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    2. Moradi, Jalal & Shahinzadeh, Hossein & Khandan, Amirsalar & Moazzami, Majid, 2017. "A profitability investigation into the collaborative operation of wind and underwater compressed air energy storage units in the spot market," Energy, Elsevier, vol. 141(C), pages 1779-1794.
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    5. Rahmanifard, Hamid & Plaksina, Tatyana, 2019. "Hybrid compressed air energy storage, wind and geothermal energy systems in Alberta: Feasibility simulation and economic assessment," Renewable Energy, Elsevier, vol. 143(C), pages 453-470.
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    7. Osmani, Atif & Zhang, Jun, 2014. "Optimal grid design and logistic planning for wind and biomass based renewable electricity supply chains under uncertainties," Energy, Elsevier, vol. 70(C), pages 514-528.
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    10. Lamy, Julian & Azevedo, Inês L. & Jaramillo, Paulina, 2014. "The role of energy storage in accessing remote wind resources in the Midwest," Energy Policy, Elsevier, vol. 68(C), pages 123-131.

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