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Grid-Scale Battery Energy Storage Operation in Australian Electricity Spot and Contingency Reserve Markets

Author

Listed:
  • Ekaterina Bayborodina

    (School of Engineering, University of Tasmania, Hobart, TAS 7001, Australia)

  • Michael Negnevitsky

    (School of Engineering, University of Tasmania, Hobart, TAS 7001, Australia)

  • Evan Franklin

    (School of Engineering, University of Tasmania, Hobart, TAS 7001, Australia)

  • Alison Washusen

    (SwitchDin Pty Ltd., Newcastle, NSW 2302, Australia)

Abstract

Conventional fossil-fuel-based power systems are undergoing rapid transformation via the replacement of coal-fired generation with wind and solar farms. The stochastic and intermittent nature of such renewable sources demands alternative dispatchable technology capable of meeting system stability and reliability needs. Battery energy storage can play a crucial role in enabling the high uptake of wind and solar generation. However, battery life is very sensitive to the way battery energy storage systems (BESS) are operated. In this paper, we propose a framework to analyse battery operation in the Australian National Electricity Market (NEM) electricity spot and contingency reserve markets. We investigate battery operation in different states of Australia under various operating strategies. By considering battery degradation costs within the operating strategy, BESS can generate revenue from the energy market without significantly compromising battery life. Participating in contingency markets, batteries can substantially increase their revenue with almost no impact on battery health. Finally, when battery systems are introduced into highly volatile markets (such as South Australia) more aggressive cycling of batteries leads to accelerated battery aging, which may be justified by increased revenue. The findings also suggest that with falling replacement costs, the operation of battery energy systems can be adjusted, increasing immediate revenues and moving the battery end-of-life conditions closer.

Suggested Citation

  • Ekaterina Bayborodina & Michael Negnevitsky & Evan Franklin & Alison Washusen, 2021. "Grid-Scale Battery Energy Storage Operation in Australian Electricity Spot and Contingency Reserve Markets," Energies, MDPI, vol. 14(23), pages 1-21, December.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:23:p:8069-:d:693619
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    References listed on IDEAS

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    1. Wei Liao & Yi Yang & Qingwei Wang & Ruoyu Wang & Xieli Fu & Yinghua Xie & Junhua Zhao, 2023. "Interpretable Hybrid Experiment Learning-Based Simulation Analysis of Power System Planning under the Spot Market Environment," Energies, MDPI, vol. 16(12), pages 1-17, June.

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