IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v10y2017i9p1257-d109599.html
   My bibliography  Save this article

A Three-Part Electricity Price Mechanism for Photovoltaic-Battery Energy Storage Power Plants Considering the Power Quality and Ancillary Service

Author

Listed:
  • Yajing Gao

    (School of Electrical and Electronic Engineering, North China Electric Power University, Baoding 071003, China)

  • Fushen Xue

    (School of Electrical and Electronic Engineering, North China Electric Power University, Baoding 071003, China)

  • Wenhai Yang

    (School of Electrical and Electronic Engineering, North China Electric Power University, Baoding 071003, China)

  • Yanping Sun

    (School of Electrical and Electronic Engineering, North China Electric Power University, Baoding 071003, China)

  • Yongjian Sun

    (School of Electrical and Electronic Engineering, North China Electric Power University, Baoding 071003, China)

  • Haifeng Liang

    (School of Electrical and Electronic Engineering, North China Electric Power University, Baoding 071003, China)

  • Peng Li

    (School of Electrical and Electronic Engineering, North China Electric Power University, Baoding 071003, China)

Abstract

To solve the problem of solar abandoning, which is accompanied by the rapid development of photovoltaic (PV) power generation, a demonstration of a photovoltaic-battery energy storage system (PV-BESS) power plant has been constructed in Qinghai province in China. However, it is difficult for the PV-BESS power plant to survive and develop with the current electricity price mechanism and subsidy policy. In this paper, a three-part electricity price mechanism is proposed based on a deep analysis of the construction and operation costs and economic income. The on-grid electricity price is divided into three parts: the capacity price, graded electricity price, and ancillary service price. First, to ensure that the investment of the PV-BESS power plant would achieve the industry benchmark income, the capacity price and benchmark electricity price are calculated using the discounted cash flow method. Then, the graded electricity price is calculated according to the grade of the quality of grid-connected power. Finally, the ancillary service price is calculated based on the graded electricity price and ancillary service compensation. The case studies verify the validity of the three-part electricity price mechanism. The verification shows that the three-part electricity price mechanism can help PV-BESS power plants to obtain good economic returns, which can promote the development of PV-BESS power plants.

Suggested Citation

  • Yajing Gao & Fushen Xue & Wenhai Yang & Yanping Sun & Yongjian Sun & Haifeng Liang & Peng Li, 2017. "A Three-Part Electricity Price Mechanism for Photovoltaic-Battery Energy Storage Power Plants Considering the Power Quality and Ancillary Service," Energies, MDPI, vol. 10(9), pages 1-21, August.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:9:p:1257-:d:109599
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/10/9/1257/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/10/9/1257/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thai-Thanh Nguyen & Hyeong-Jun Yoo & Hak-Man Kim, 2017. "Analyzing the Impacts of System Parameters on MPC-Based Frequency Control for a Stand-Alone Microgrid," Energies, MDPI, vol. 10(4), pages 1-17, March.
    2. Rui Hou & Huihui Song & Thai-Thanh Nguyen & Yanbin Qu & Hak-Man Kim, 2017. "Robustness Improvement of Superconducting Magnetic Energy Storage System in Microgrids Using an Energy Shaping Passivity-Based Control Strategy," Energies, MDPI, vol. 10(5), pages 1-23, May.
    3. Zakeri, Behnam & Syri, Sanna, 2015. "Electrical energy storage systems: A comparative life cycle cost analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 569-596.
    4. Lai, Chun Sing & McCulloch, Malcolm D., 2017. "Levelized cost of electricity for solar photovoltaic and electrical energy storage," Applied Energy, Elsevier, vol. 190(C), pages 191-203.
    5. 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.
    6. Singh, Parm Pal & Singh, Sukhmeet, 2010. "Realistic generation cost of solar photovoltaic electricity," Renewable Energy, Elsevier, vol. 35(3), pages 563-569.
    7. Yajing Gao & Huaxin Cheng & Jing Zhu & Haifeng Liang & Peng Li, 2016. "The Optimal Dispatch of a Power System Containing Virtual Power Plants under Fog and Haze Weather," Sustainability, MDPI, vol. 8(1), pages 1-22, January.
    8. Yagmur, Levent, 2016. "Multi-criteria evaluation and priority analysis for localization equipment in a thermal power plant using the AHP (analytic hierarchy process)," Energy, Elsevier, vol. 94(C), pages 476-482.
    9. Talavera, D.L. & Pérez-Higueras, P. & Ruíz-Arias, J.A. & Fernández, E.F., 2015. "Levelised cost of electricity in high concentrated photovoltaic grid connected systems: Spatial analysis of Spain," Applied Energy, Elsevier, vol. 151(C), pages 49-59.
    10. Somi Jung & Dongwoo Kim, 2017. "Pareto-Efficient Capacity Planning for Residential Photovoltaic Generation and Energy Storage with Demand-Side Load Management," Energies, MDPI, vol. 10(4), pages 1-20, March.
    11. Berwal, Anil K. & Kumar, Sanjay & Kumari, Nisha & Kumar, Virender & Haleem, Abid, 2017. "Design and analysis of rooftop grid tied 50kW capacity Solar Photovoltaic (SPV) power plant," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 1288-1299.
    12. Fares, Robert L. & Meyers, Jeremy P. & Webber, Michael E., 2014. "A dynamic model-based estimate of the value of a vanadium redox flow battery for frequency regulation in Texas," Applied Energy, Elsevier, vol. 113(C), pages 189-198.
    13. Cartelle Barros, Juan José & Lara Coira, Manuel & de la Cruz López, María Pilar & del Caño Gochi, Alfredo, 2016. "Probabilistic life-cycle cost analysis for renewable and non-renewable power plants," Energy, Elsevier, vol. 112(C), pages 774-787.
    14. Ibrahem E. Atawi & Ahmed M. Kassem, 2017. "Optimal Control Based on Maximum Power Point Tracking (MPPT) of an Autonomous Hybrid Photovoltaic/Storage System in Micro Grid Applications," Energies, MDPI, vol. 10(5), pages 1-14, May.
    15. Lesser, Jonathan A. & Su, Xuejuan, 2008. "Design of an economically efficient feed-in tariff structure for renewable energy development," Energy Policy, Elsevier, vol. 36(3), pages 981-990, March.
    16. Li, Wandi & Luo, Dongkun & Yuan, Jiehui, 2017. "A new approach for the comprehensive grading of petroleum reserves in China: Two natural gas examples," Energy, Elsevier, vol. 118(C), pages 914-926.
    17. Fabio Bignucolo & Alberto Cerretti & Massimiliano Coppo & Andrea Savio & Roberto Turri, 2017. "Effects of Energy Storage Systems Grid Code Requirements on Interface Protection Performances in Low Voltage Networks," Energies, MDPI, vol. 10(3), pages 1-20, March.
    18. Yajing Gao & Jing Zhu & Huaxin Cheng & Fushen Xue & Qing Xie & Peng Li, 2016. "Study of Short-Term Photovoltaic Power Forecast Based on Error Calibration under Typical Climate Categories," Energies, MDPI, vol. 9(7), pages 1-15, July.
    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. Tsao, Yu-Chung & Ai, Ho Thi Thu & Lu, Jye-Chyi & Wang, Chao, 2024. "Game theory-based electricity pricing decisions incorporating prosumer energy preferences and renewable portfolio standard," Energy, Elsevier, vol. 306(C).
    2. Tsao, Yu-Chung & Thanh, Vo-Van & Lu, Jye-Chyi, 2022. "Efficiency of resilient three-part tariff pricing schemes in residential power markets," Energy, Elsevier, vol. 239(PD).

    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. Lan, Hai & Wen, Shuli & Hong, Ying-Yi & Yu, David C. & Zhang, Lijun, 2015. "Optimal sizing of hybrid PV/diesel/battery in ship power system," Applied Energy, Elsevier, vol. 158(C), pages 26-34.
    2. Pusceddu, Elian & Zakeri, Behnam & Castagneto Gissey, Giorgio, 2021. "Synergies between energy arbitrage and fast frequency response for battery energy storage systems," Applied Energy, Elsevier, vol. 283(C).
    3. Lai, Chun Sing & Locatelli, Giorgio, 2021. "Economic and financial appraisal of novel large-scale energy storage technologies," Energy, Elsevier, vol. 214(C).
    4. Weiliang Liu & Changliang Liu & Yongjun Lin & Liangyu Ma & Feng Xiong & Jintuo Li, 2018. "Ultra-Short-Term Forecast of Photovoltaic Output Power under Fog and Haze Weather," Energies, MDPI, vol. 11(3), pages 1-22, February.
    5. Aquila, Giancarlo & Coelho, Eden de Oliveira Pinto & Bonatto, Benedito Donizeti & Pamplona, Edson de Oliveira & Nakamura, Wilson Toshiro, 2021. "Perspective of uncertainty and risk from the CVaR-LCOE approach: An analysis of the case of PV microgeneration in Minas Gerais, Brazil," Energy, Elsevier, vol. 226(C).
    6. Yajing Gao & Wenhai Yang & Jing Zhu & Jiafeng Ren & Peng Li, 2017. "Evaluating the Effect of Distributed Generation on Power Supply Capacity in Active Distribution System Based on Sensitivity Analysis," Energies, MDPI, vol. 10(10), pages 1-14, September.
    7. Pillot, Benjamin & de Siqueira, Sandro & Dias, João Batista, 2018. "Grid parity analysis of distributed PV generation using Monte Carlo approach: The Brazilian case," Renewable Energy, Elsevier, vol. 127(C), pages 974-988.
    8. Orioli, Aldo & Di Gangi, Alessandra, 2015. "The recent change in the Italian policies for photovoltaics: Effects on the payback period and levelized cost of electricity of grid-connected photovoltaic systems installed in urban contexts," Energy, Elsevier, vol. 93(P2), pages 1989-2005.
    9. Kies, Alexander & Schyska, Bruno U. & Bilousova, Mariia & El Sayed, Omar & Jurasz, Jakub & Stoecker, Horst, 2021. "Critical review of renewable generation datasets and their implications for European power system models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).
    10. Alexandra G. Papadopoulou & George Vasileiou & Alexandros Flamos, 2020. "A Comparison of Dispatchable RES Technoeconomics: Is There a Niche for Concentrated Solar Power?," Energies, MDPI, vol. 13(18), pages 1-22, September.
    11. Samuel Matthew G. Dumlao & Keiichi N. Ishihara, 2021. "Dynamic Cost-Optimal Assessment of Complementary Diurnal Electricity Storage Capacity in High PV Penetration Grid," Energies, MDPI, vol. 14(15), pages 1-23, July.
    12. Koecklin, Manuel Tong & Longoria, Genaro & Fitiwi, Desta Z. & DeCarolis, Joseph F. & Curtis, John, 2021. "Public acceptance of renewable electricity generation and transmission network developments: Insights from Ireland," Energy Policy, Elsevier, vol. 151(C).
    13. Tong Koecklin, Manuel & Fitiwi, Desta & de Carolis, Joseph F. & Curtis, John, 2020. "Renewable electricity generation and transmission network developments in light of public opposition: Insights from Ireland," Papers WP653, Economic and Social Research Institute (ESRI).
    14. Orioli, Aldo & Di Gangi, Alessandra, 2017. "Six-years-long effects of the Italian policies for photovoltaics on the grid parity of grid-connected photovoltaic systems installed in urban contexts," Energy, Elsevier, vol. 130(C), pages 55-75.
    15. Lai, Chun Sing & Jia, Youwei & Lai, Loi Lei & Xu, Zhao & McCulloch, Malcolm D. & Wong, Kit Po, 2017. "A comprehensive review on large-scale photovoltaic system with applications of electrical energy storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 439-451.
    16. Barzegkar-Ntovom, Georgios A. & Chatzigeorgiou, Nikolas G. & Nousdilis, Angelos I. & Vomva, Styliani A. & Kryonidis, Georgios C. & Kontis, Eleftherios O. & Georghiou, George E. & Christoforidis, Georg, 2020. "Assessing the viability of battery energy storage systems coupled with photovoltaics under a pure self-consumption scheme," Renewable Energy, Elsevier, vol. 152(C), pages 1302-1309.
    17. Tran, Thomas T.D. & Smith, Amanda D., 2018. "Incorporating performance-based global sensitivity and uncertainty analysis into LCOE calculations for emerging renewable energy technologies," Applied Energy, Elsevier, vol. 216(C), pages 157-171.
    18. Khan, Agha Salman M. & Verzijlbergh, Remco A. & Sakinci, Ozgur Can & De Vries, Laurens J., 2018. "How do demand response and electrical energy storage affect (the need for) a capacity market?," Applied Energy, Elsevier, vol. 214(C), pages 39-62.
    19. Kosmadakis, Ioannis E. & Elmasides, Costas & Koulinas, Georgios & Tsagarakis, Konstantinos P., 2021. "Energy unit cost assessment of six photovoltaic-battery configurations," Renewable Energy, Elsevier, vol. 173(C), pages 24-41.
    20. Califano, M. & Sorrentino, M. & Rosen, M.A. & Pianese, C., 2022. "Optimal heat and power management of a reversible solid oxide cell based microgrid for effective technoeconomic hydrogen consumption and storage," Applied Energy, Elsevier, vol. 319(C).

    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:gam:jeners:v:10:y:2017:i:9:p:1257-:d:109599. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.