IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v94y2016icp126-137.html
   My bibliography  Save this article

Economic feasibility of stationary electrochemical storages for electric bill management applications: The Italian scenario

Author

Listed:
  • Telaretti, E.
  • Graditi, G.
  • Ippolito, M.G.
  • Zizzo, G.

Abstract

Battery energy storage systems (BESSs) are expected to become a fundamental element of the electricity infrastructure, thanks to their ability to decouple generation and demand over time. BESSs can also be used to store electricity during low-price hours, when the demand is low, and to meet the demand during peak hours, thus leading to savings for the consumer. This work focuses on the economic viability of BESS from the point of view of the electricity customer. The analysis refers to a lithium-ion (Li-ion), an advanced lead-acid, a zinc-based, a sodium-sulphur (NaS) and a flow battery. The total investment and replacement costs are estimated in order to calculate the cumulated cash flow, the net present value (NPV) and the internal rate of return (IRR) of the investment. A parametric analysis is further carried out under two different assumptions: a) varying the difference between high and low electricity prices, b) varying the peak demand charges. The analysis reveals that some electrochemical technologies are more suitable than others for electric bill management applications, and that a profit for the customer can be reached only with a significant difference between high and low electricity prices or when high peak demand charges are applied.

Suggested Citation

  • Telaretti, E. & Graditi, G. & Ippolito, M.G. & Zizzo, G., 2016. "Economic feasibility of stationary electrochemical storages for electric bill management applications: The Italian scenario," Energy Policy, Elsevier, vol. 94(C), pages 126-137.
    • Handle: RePEc:eee:enepol:v:94:y:2016:i:c:p:126-137
    DOI: 10.1016/j.enpol.2016.04.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421516301707
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2016.04.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Favuzza, S. & Galioto, G. & Ippolito, M.G. & Massaro, F. & Milazzo, F. & Pecoraro, G. & Riva Sanseverino, E. & Telaretti, E., 2015. "Real-time pricing for aggregates energy resources in the Italian energy market," Energy, Elsevier, vol. 87(C), pages 251-258.
    2. Shcherbakova, Anastasia & Kleit, Andrew & Cho, Joohyun, 2014. "The value of energy storage in South Korea’s electricity market: A Hotelling approach," Applied Energy, Elsevier, vol. 125(C), pages 93-102.
    3. Walawalkar, Rahul & Apt, Jay & Mancini, Rick, 2007. "Economics of electric energy storage for energy arbitrage and regulation in New York," Energy Policy, Elsevier, vol. 35(4), pages 2558-2568, April.
    4. Sioshansi, Ramteen & Denholm, Paul & Jenkin, Thomas & Weiss, Jurgen, 2009. "Estimating the value of electricity storage in PJM: Arbitrage and some welfare effects," Energy Economics, Elsevier, vol. 31(2), pages 269-277, March.
    5. Graditi, G. & Ippolito, M.G. & Telaretti, E. & Zizzo, G., 2016. "Technical and economical assessment of distributed electrochemical storages for load shifting applications: An Italian case study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 515-523.
    6. Enrico Telaretti & Mariano Ippolito & Luigi Dusonchet, 2015. "A Simple Operating Strategy of Small-Scale Battery Energy Storages for Energy Arbitrage under Dynamic Pricing Tariffs," Energies, MDPI, vol. 9(1), pages 1-20, December.
    7. Dufo-López, Rodolfo & Bernal-Agustín, José L. & Domínguez-Navarro, José A., 2009. "Generation management using batteries in wind farms: Economical and technical analysis for Spain," Energy Policy, Elsevier, vol. 37(1), pages 126-139, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shukhobodskiy, Alexander Alexandrovich & Colantuono, Giuseppe, 2020. "RED WoLF: Combining a battery and thermal energy reservoirs as a hybrid storage system," Applied Energy, Elsevier, vol. 274(C).
    2. Bordin, Chiara & Anuta, Harold Oghenetejiri & Crossland, Andrew & Gutierrez, Isabel Lascurain & Dent, Chris J. & Vigo, Daniele, 2017. "A linear programming approach for battery degradation analysis and optimization in offgrid power systems with solar energy integration," Renewable Energy, Elsevier, vol. 101(C), pages 417-430.
    3. Theo, Wai Lip & Lim, Jeng Shiun & Ho, Wai Shin & Hashim, Haslenda & Lee, Chew Tin, 2017. "Review of distributed generation (DG) system planning and optimisation techniques: Comparison of numerical and mathematical modelling methods," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 531-573.
    4. Kazhamiaka, Fiodar & Jochem, Patrick & Keshav, Srinivasan & Rosenberg, Catherine, 2017. "On the influence of jurisdiction on the profitability of residential photovoltaic-storage systems: A multi-national case study," Energy Policy, Elsevier, vol. 109(C), pages 428-440.
    5. Tronchin, Lamberto & Manfren, Massimiliano & Nastasi, Benedetto, 2018. "Energy efficiency, demand side management and energy storage technologies – A critical analysis of possible paths of integration in the built environment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 95(C), pages 341-353.
    6. Byeongkwan Kang & Kyuhee Jang & Sounghoan Park & Myeong-in Choi & Sehyun Park, 2018. "Energy Storage System Control Algorithm by Operating Target Power to Improve Energy Sustainability of Smart Home," Sustainability, MDPI, vol. 10(1), pages 1-16, January.
    7. Braeuer, Fritz & Rominger, Julian & McKenna, Russell & Fichtner, Wolf, 2019. "Battery storage systems: An economic model-based analysis of parallel revenue streams and general implications for industry," Applied Energy, Elsevier, vol. 239(C), pages 1424-1440.
    8. Kevin Marnell & Manasseh Obi & Robert Bass, 2019. "Transmission-Scale Battery Energy Storage Systems: A Systematic Literature Review," Energies, MDPI, vol. 12(23), pages 1-31, December.
    9. Yan, Zhe & Zhang, Yongming & Liang, Runqi & Jin, Wenrui, 2020. "An allocative method of hybrid electrical and thermal energy storage capacity for load shifting based on seasonal difference in district energy planning," Energy, Elsevier, vol. 207(C).
    10. Emily Spayde & Pedro J. Mago & Rogelio Luck, 2018. "Economic, Energetic, and Environmental Performance of a Solar Powered Organic Rankine Cycle with Electric Energy Storage in Different Commercial Buildings," Energies, MDPI, vol. 11(2), pages 1-17, January.
    11. Chong Chen & Xuan Zhou & Xiaowei Yang & Zhiheng He & Zhuo Li & Zhengtian Li & Xiangning Lin & Ting Wen & Yixin Zhuo & Ning Tong, 2018. "Collaborative Optimal Pricing and Day-Ahead and Intra-Day Integrative Dispatch of the Active Distribution Network with Multi-Type Active Loads," Energies, MDPI, vol. 11(4), pages 1-22, April.
    12. Fabian Scheller & Robert Burkhardt & Robert Schwarzeit & Russell McKenna & Thomas Bruckner, 2020. "Competition between simultaneous demand-side flexibility options: The case of community electricity storage systems," Papers 2011.05809, arXiv.org.
    13. Wenxia Liu & Shu Wang & Ye Chen & Xingliang Chen & Shuya Niu & Zongqi Liu, 2017. "Coordinate Optimization of the Distribution Network Electricity Price, Energy Storage Operation Strategy, and Capacity under a Shared Mechanism," Sustainability, MDPI, vol. 9(6), pages 1-18, June.
    14. Papadopoulos, Agis M., 2020. "Renewable energies and storage in small insular systems: Potential, perspectives and a case study," Renewable Energy, Elsevier, vol. 149(C), pages 103-114.
    15. Jana, Kuntal & Ray, Avishek & Majoumerd, Mohammad Mansouri & Assadi, Mohsen & De, Sudipta, 2017. "Polygeneration as a future sustainable energy solution – A comprehensive review," Applied Energy, Elsevier, vol. 202(C), pages 88-111.
    16. Saran Ganesh & Arcadio Perilla & Jose Rueda Torres & Peter Palensky & Aleksandra Lekić & Mart van der Meijden, 2021. "Generic EMT Model for Real-Time Simulation of Large Disturbances in 2 GW Offshore HVAC-HVDC Renewable Energy Hubs," Energies, MDPI, vol. 14(3), pages 1-30, February.
    17. Lampropoulos, Ioannis & van den Broek, Machteld & van der Hoofd, Erik & Hommes, Klaas & van Sark, Wilfried, 2018. "A system perspective to the deployment of flexibility through aggregator companies in the Netherlands," Energy Policy, Elsevier, vol. 118(C), pages 534-551.
    18. Scheller, Fabian & Burkhardt, Robert & Schwarzeit, Robert & McKenna, Russell & Bruckner, Thomas, 2020. "Competition between simultaneous demand-side flexibility options: the case of community electricity storage systems," Applied Energy, Elsevier, vol. 269(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dusonchet, L. & Favuzza, S. & Massaro, F. & Telaretti, E. & Zizzo, G., 2019. "Technological and legislative status point of stationary energy storages in the EU," Renewable and Sustainable Energy Reviews, Elsevier, vol. 101(C), pages 158-167.
    2. Graditi, G. & Ippolito, M.G. & Telaretti, E. & Zizzo, G., 2016. "Technical and economical assessment of distributed electrochemical storages for load shifting applications: An Italian case study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 515-523.
    3. Dufo-López, Rodolfo, 2015. "Optimisation of size and control of grid-connected storage under real time electricity pricing conditions," Applied Energy, Elsevier, vol. 140(C), pages 395-408.
    4. Cho, Joohyun & Kleit, Andrew N., 2015. "Energy storage systems in energy and ancillary markets: A backwards induction approach," Applied Energy, Elsevier, vol. 147(C), pages 176-183.
    5. Zafirakis, Dimitrios & Chalvatzis, Konstantinos J. & Baiocchi, Giovanni & Daskalakis, Georgios, 2016. "The value of arbitrage for energy storage: Evidence from European electricity markets," Applied Energy, Elsevier, vol. 184(C), pages 971-986.
    6. Berrada, Asmae & Loudiyi, Khalid, 2016. "Operation, sizing, and economic evaluation of storage for solar and wind power plants," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1117-1129.
    7. Pedro Crespo Del Granado & Stein Wallace & Zhan Pang, 2016. "The impact of wind uncertainty on the strategic valuation of distributed electricity storage," Computational Management Science, Springer, vol. 13(1), pages 5-27, January.
    8. McConnell, Dylan & Forcey, Tim & Sandiford, Mike, 2015. "Estimating the value of electricity storage in an energy-only wholesale market," Applied Energy, Elsevier, vol. 159(C), pages 422-432.
    9. Wonchang Hur & Yongma Moon & Kwangsup Shin & Wooje Kim & Suchul Nam & Kijun Park, 2015. "Economic Value of Li-ion Energy Storage System in Frequency Regulation Application from Utility Firm’s Perspective in Korea," Energies, MDPI, vol. 8(6), pages 1-18, May.
    10. Sioshansi, Ramteen & Denholm, Paul & Jenkin, Thomas, 2011. "A comparative analysis of the value of pure and hybrid electricity storage," Energy Economics, Elsevier, vol. 33(1), pages 56-66, January.
    11. Monica Giulietti & Luigi Grossi, 2013. "Revenues from storage in a competitive electricity market: Empirical evidence from Great Britain," Working Papers 2013/37, Institut d'Economia de Barcelona (IEB).
    12. He, Xian & Delarue, Erik & D'haeseleer, William & Glachant, Jean-Michel, 2011. "A novel business model for aggregating the values of electricity storage," Energy Policy, Elsevier, vol. 39(3), pages 1575-1585, March.
    13. de Sisternes, Fernando J. & Jenkins, Jesse D. & Botterud, Audun, 2016. "The value of energy storage in decarbonizing the electricity sector," Applied Energy, Elsevier, vol. 175(C), pages 368-379.
    14. Yushen Miao & Tianyi Chen & Shengrong Bu & Hao Liang & Zhu Han, 2021. "Co-Optimizing Battery Storage for Energy Arbitrage and Frequency Regulation in Real-Time Markets Using Deep Reinforcement Learning," Energies, MDPI, vol. 14(24), pages 1-17, December.
    15. Meinrenken, Christoph J. & Mehmani, Ali, 2019. "Concurrent optimization of thermal and electric storage in commercial buildings to reduce operating cost and demand peaks under time-of-use tariffs," Applied Energy, Elsevier, vol. 254(C).
    16. Bordin, Chiara & Anuta, Harold Oghenetejiri & Crossland, Andrew & Gutierrez, Isabel Lascurain & Dent, Chris J. & Vigo, Daniele, 2017. "A linear programming approach for battery degradation analysis and optimization in offgrid power systems with solar energy integration," Renewable Energy, Elsevier, vol. 101(C), pages 417-430.
    17. Chyong, Chi Kong & Newbery, David, 2022. "A unit commitment and economic dispatch model of the GB electricity market – Formulation and application to hydro pumped storage," Energy Policy, Elsevier, vol. 170(C).
    18. Rious, Vincent & Perez, Yannick, 2014. "Review of supporting scheme for island powersystem storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 754-765.
    19. Telaretti, E. & Dusonchet, L., 2017. "Stationary battery technologies in the U.S.: Development Trends and prospects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 380-392.
    20. Brändle, Gregor & Schönfisch, Max & Schulte, Simon, 2020. "Estimating Long-Term Global Supply Costs for Low-Carbon Hydrogen," EWI Working Papers 2020-4, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI), revised 10 Aug 2021.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:94:y:2016:i:c:p:126-137. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.