IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v13y2020i18p4600-d408922.html
   My bibliography  Save this article

Operating and Investment Models for Energy Storage Systems

Author

Listed:
  • Marija Miletić

    (Faculty of Electrical Engineering and Computing, University of Zagreb, Unska ulica No. 3, 10000 Zagreb, Croatia)

  • Hrvoje Pandžić

    (Faculty of Electrical Engineering and Computing, University of Zagreb, Unska ulica No. 3, 10000 Zagreb, Croatia)

  • Dechang Yang

    (College of Information and Electrical Engineering, China Agricultural University, No. 17 Qinghuadonglu, Haidian, Beijing 100083, China)

Abstract

In the context of climate changes and the rapid growth of energy consumption, intermittent renewable energy sources (RES) are being predominantly installed in power systems. It has been largely elucidated that challenges that RES present to the system can be mitigated with energy storage systems (ESS). However, besides providing flexibility to intermittent RES, ESS have other sources of revenue, such as price arbitrage in the markets, balancing services, and reducing the cost of electricity procurement to end consumers. In order to operate the ESS in the most profitable way, it is often necessary to make optimal siting and sizing decisions, and to determine optimal ways for the ESS to participate in a variety of energy and ancillary service markets. As a result, many publications on ESS models with various goals and operating environments are available. This paper aims at presenting the results of these papers in a structured way. A standard ESS model is first outlined, and that is followed by a literature review on operational and investment ESS models at the transmission and distribution levels. Both the price taking and price making models are elaborated on and presented in detail. Based on the examined body of work, the paper is concluded with recommendations for future research paths in the analysis of ESS.

Suggested Citation

  • Marija Miletić & Hrvoje Pandžić & Dechang Yang, 2020. "Operating and Investment Models for Energy Storage Systems," Energies, MDPI, vol. 13(18), pages 1-33, September.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:18:p:4600-:d:408922
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/13/18/4600/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/13/18/4600/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jacob, Ammu Susanna & Banerjee, Rangan & Ghosh, Prakash C., 2018. "Sizing of hybrid energy storage system for a PV based microgrid through design space approach," Applied Energy, Elsevier, vol. 212(C), pages 640-653.
    2. MacRae, C.A.G. & Ernst, A.T. & Ozlen, M., 2016. "A Benders decomposition approach to transmission expansion planning considering energy storage," Energy, Elsevier, vol. 112(C), pages 795-803.
    3. Pandžić, H. & Dvorkin, Y. & Carrión, M., 2018. "Investments in merchant energy storage: Trading-off between energy and reserve markets," Applied Energy, Elsevier, vol. 230(C), pages 277-286.
    4. Lundin, Erik & Tangerås, Thomas P., 2020. "Cournot competition in wholesale electricity markets: The Nordic power exchange, Nord Pool," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    5. Shafiee, Soroush & Zamani-Dehkordi, Payam & Zareipour, Hamidreza & Knight, Andrew M., 2016. "Economic assessment of a price-maker energy storage facility in the Alberta electricity market," Energy, Elsevier, vol. 111(C), pages 537-547.
    6. Walter Gil-González & Oscar Danilo Montoya & Luis Fernando Grisales-Noreña & Fernando Cruz-Peragón & Gerardo Alcalá, 2020. "Economic Dispatch of Renewable Generators and BESS in DC Microgrids Using Second-Order Cone Optimization," Energies, MDPI, vol. 13(7), pages 1-15, April.
    7. Sousa, Jorge A.M. & Teixeira, Fábio & Faias, Sérgio, 2014. "Impact of a price-maker pumped storage hydro unit on the integration of wind energy in power systems," Energy, Elsevier, vol. 69(C), pages 3-11.
    8. Pandžić, Hrvoje & Morales, Juan M. & Conejo, Antonio J. & Kuzle, Igor, 2013. "Offering model for a virtual power plant based on stochastic programming," Applied Energy, Elsevier, vol. 105(C), pages 282-292.
    9. Babacan, Oytun & Ratnam, Elizabeth L. & Disfani, Vahid R. & Kleissl, Jan, 2017. "Distributed energy storage system scheduling considering tariff structure, energy arbitrage and solar PV penetration," Applied Energy, Elsevier, vol. 205(C), pages 1384-1393.
    10. Poncelet, Kris & Delarue, Erik & D’haeseleer, William, 2020. "Unit commitment constraints in long-term planning models: Relevance, pitfalls and the role of assumptions on flexibility," Applied Energy, Elsevier, vol. 258(C).
    11. Ju, Liwei & Tan, Zhongfu & Yuan, Jinyun & Tan, Qingkun & Li, Huanhuan & Dong, Fugui, 2016. "A bi-level stochastic scheduling optimization model for a virtual power plant connected to a wind–photovoltaic–energy storage system considering the uncertainty and demand response," Applied Energy, Elsevier, vol. 171(C), pages 184-199.
    12. Sharma, Vanika & Haque, Mohammed H. & Aziz, Syed Mahfuzul, 2019. "Energy cost minimization for net zero energy homes through optimal sizing of battery storage system," Renewable Energy, Elsevier, vol. 141(C), pages 278-286.
    13. Cuiping Li & Shining Zhang & Jiaxing Zhang & Jun Qi & Junhui Li & Qi Guo & Hongfei You, 2018. "Method for the Energy Storage Configuration of Wind Power Plants with Energy Storage Systems used for Black-Start," Energies, MDPI, vol. 11(12), pages 1-16, December.
    14. Varkani, Ali Karimi & Daraeepour, Ali & Monsef, Hassan, 2011. "A new self-scheduling strategy for integrated operation of wind and pumped-storage power plants in power markets," Applied Energy, Elsevier, vol. 88(12), pages 5002-5012.
    15. Iria, José & Heleno, Miguel & Cardoso, Gonçalo, 2019. "Optimal sizing and placement of energy storage systems and on-load tap changer transformers in distribution networks," Applied Energy, Elsevier, vol. 250(C), pages 1147-1157.
    16. Weibelzahl, Martin & Märtz, Alexandra, 2018. "On the effects of storage facilities on optimal zonal pricing in electricity markets," Energy Policy, Elsevier, vol. 113(C), pages 778-794.
    17. Das, Choton K. & Bass, Octavian & Mahmoud, Thair S. & Kothapalli, Ganesh & Mousavi, Navid & Habibi, Daryoush & Masoum, Mohammad A.S., 2019. "Optimal allocation of distributed energy storage systems to improve performance and power quality of distribution networks," Applied Energy, Elsevier, vol. 252(C), pages 1-1.
    18. Mejia, Cristian & Kajikawa, Yuya, 2020. "Emerging topics in energy storage based on a large-scale analysis of academic articles and patents," Applied Energy, Elsevier, vol. 263(C).
    19. Luo, Xing & Wang, Jihong & Dooner, Mark & Clarke, Jonathan, 2015. "Overview of current development in electrical energy storage technologies and the application potential in power system operation," Applied Energy, Elsevier, vol. 137(C), pages 511-536.
    20. Sioshansi, Ramteen, 2014. "When energy storage reduces social welfare," Energy Economics, Elsevier, vol. 41(C), pages 106-116.
    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. Carlos García-Santacruz & Luis Galván & Juan M. Carrasco & Eduardo Galván, 2021. "Sizing and Management of Energy Storage Systems in Large-Scale Power Plants Using Price Control and Artificial Intelligence," Energies, MDPI, vol. 14(11), pages 1-17, June.
    2. Kristina Pandžić & Ivan Pavić & Ivan Andročec & Hrvoje Pandžić, 2020. "Optimal Battery Storage Participation in European Energy and Reserves Markets," Energies, MDPI, vol. 13(24), pages 1-21, December.
    3. Željko Tomšić & Sara Raos & Ivan Rajšl & Perica Ilak, 2020. "Role of Electric Vehicles in Transition to Low Carbon Power System—Case Study Croatia," Energies, MDPI, vol. 13(24), pages 1-22, December.
    4. Gaurav Chaudhary & Jacob J. Lamb & Odne S. Burheim & Bjørn Austbø, 2021. "Review of Energy Storage and Energy Management System Control Strategies in Microgrids," Energies, MDPI, vol. 14(16), pages 1-26, August.
    5. Xu, Jianxi & Zeng, Jiabing & Huang, Jinyong, 2024. "A management system for energy storage," Applied Energy, Elsevier, vol. 368(C).
    6. Vykhodtsev, Anton V. & Jang, Darren & Wang, Qianpu & Rosehart, William & Zareipour, Hamidreza, 2022. "A review of modelling approaches to characterize lithium-ion battery energy storage systems in techno-economic analyses of power systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    7. József Magyari & Krisztina Hegedüs & Botond Sinóros-Szabó, 2022. "Integration Opportunities of Power-to-Gas and Internet-of-Things Technical Advancements: A Systematic Literature Review," Energies, MDPI, vol. 15(19), pages 1-19, September.

    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. Calvillo, C.F. & Sánchez-Miralles, A. & Villar, J. & Martín, F., 2016. "Optimal planning and operation of aggregated distributed energy resources with market participation," Applied Energy, Elsevier, vol. 182(C), pages 340-357.
    2. Zhao, Dongwei & Jafari, Mehdi & Botterud, Audun & Sakti, Apurba, 2022. "Strategic energy storage investments: A case study of the CAISO electricity market," Applied Energy, Elsevier, vol. 325(C).
    3. Bjørndal, Endre & Bjørndal, Mette Helene & Coniglio, Stefano & Körner, Marc-Fabian & Leinauer, Christina & Weibelzahl, Martin, 2023. "Energy storage operation and electricity market design: On the market power of monopolistic storage operators," European Journal of Operational Research, Elsevier, vol. 307(2), pages 887-909.
    4. Mohammad Mohammadi Roozbehani & Ehsan Heydarian-Forushani & Saeed Hasanzadeh & Seifeddine Ben Elghali, 2022. "Virtual Power Plant Operational Strategies: Models, Markets, Optimization, Challenges, and Opportunities," Sustainability, MDPI, vol. 14(19), pages 1-23, September.
    5. De Vivero-Serrano, Gustavo & Bruninx, Kenneth & Delarue, Erik, 2019. "Implications of bid structures on the offering strategies of merchant energy storage systems," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    6. Chen, Yang & Odukomaiya, Adewale & Kassaee, Saiid & O’Connor, Patrick & Momen, Ayyoub M. & Liu, Xiaobing & Smith, Brennan T., 2019. "Preliminary analysis of market potential for a hydropneumatic ground-level integrated diverse energy storage system," Applied Energy, Elsevier, vol. 242(C), pages 1237-1247.
    7. Keon Baek & Woong Ko & Jinho Kim, 2019. "Optimal Scheduling of Distributed Energy Resources in Residential Building under the Demand Response Commitment Contract," Energies, MDPI, vol. 12(14), pages 1-19, July.
    8. Alain Aoun & Mehdi Adda & Adrian Ilinca & Mazen Ghandour & Hussein Ibrahim, 2024. "Optimizing Virtual Power Plant Management: A Novel MILP Algorithm to Minimize Levelized Cost of Energy, Technical Losses, and Greenhouse Gas Emissions," Energies, MDPI, vol. 17(16), pages 1-23, August.
    9. Ting Zhang & Shuaishuai Cao & Lingying Pan & Chenyu Zhou, 2020. "A Policy Effect Analysis of China’s Energy Storage Development Based on a Multi-Agent Evolutionary Game Model," Energies, MDPI, vol. 13(23), pages 1-35, November.
    10. Ahmed G. Abo-Khalil & Mohammad Alobaid, 2023. "A Guide to the Integration and Utilization of Energy Storage Systems with a Focus on Demand Resource Management and Power Quality Enhancement," Sustainability, MDPI, vol. 15(20), pages 1-19, October.
    11. Jiang, Yinghua & Kang, Lixia & Liu, Yongzhong, 2019. "A unified model to optimize configuration of battery energy storage systems with multiple types of batteries," Energy, Elsevier, vol. 176(C), pages 552-560.
    12. Su, Chengguo & Cheng, Chuntian & Wang, Peilin & Shen, Jianjian & Wu, Xinyu, 2019. "Optimization model for long-distance integrated transmission of wind farms and pumped-storage hydropower plants," Applied Energy, Elsevier, vol. 242(C), pages 285-293.
    13. Dongwei Zhao & Mehdi Jafari & Audun Botterud & Apurba Sakti, 2022. "Strategic Storage Investment in Electricity Markets," Papers 2201.02290, arXiv.org, revised Mar 2022.
    14. Wei, Congying & Xu, Jian & Liao, Siyang & Sun, Yuanzhang & Jiang, Yibo & Ke, Deping & Zhang, Zhen & Wang, Jing, 2018. "A bi-level scheduling model for virtual power plants with aggregated thermostatically controlled loads and renewable energy," Applied Energy, Elsevier, vol. 224(C), pages 659-670.
    15. Hun-Chul Seo, 2018. "Development of Reclosing Method in a Distribution System with Distributed Generation and Battery Energy Storage System," Energies, MDPI, vol. 11(6), pages 1-18, May.
    16. Javed, Muhammad Shahzad & Ma, Tao & Jurasz, Jakub & Amin, Muhammad Yasir, 2020. "Solar and wind power generation systems with pumped hydro storage: Review and future perspectives," Renewable Energy, Elsevier, vol. 148(C), pages 176-192.
    17. Morstyn, Thomas & Chilcott, Martin & McCulloch, Malcolm D., 2019. "Gravity energy storage with suspended weights for abandoned mine shafts," Applied Energy, Elsevier, vol. 239(C), pages 201-206.
    18. Kim, Seokwoo & Choi, Dong Gu, 2024. "A sample robust optimal bidding model for a virtual power plant," European Journal of Operational Research, Elsevier, vol. 316(3), pages 1101-1113.
    19. Guoqiang Sun & Weihang Qian & Wenjin Huang & Zheng Xu & Zhongxing Fu & Zhinong Wei & Sheng Chen, 2019. "Stochastic Adaptive Robust Dispatch for Virtual Power Plants Using the Binding Scenario Identification Approach," Energies, MDPI, vol. 12(10), pages 1-23, May.
    20. Domínguez, R. & Conejo, A.J. & Carrión, M., 2014. "Operation of a fully renewable electric energy system with CSP plants," Applied Energy, Elsevier, vol. 119(C), pages 417-430.

    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:13:y:2020:i:18:p:4600-:d:408922. 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.