The value of Electricity Storage
A new study on the value of electricity storage has been published by Energinet and EA Energy Analyses and will supplement the technology aspects of the recent Technology data Catalogue on Energy Storage
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Creating value from storage of electricity
A new study on the value of electricity storage in the context of the danish power system is available now. Electric storage has experienced a growing interest in the last years due to a general cost drop, its manifold potential applications in the energy sector and a wide array of technological options. The attractiveness of electric storage is motivated by its ability to provide multiple grid-related and market services and potentially combine them into a single business case.
The study highlights the feature of electricity storage technologies and studies the suitability of electricity storage to create value from flexibility and system services. Additionally this study supplements the technology aspects in the recent Technology data Catalogue on Energy Storage. Batteries is the type of storage with the most far-reaching applications; among them Li-ion technologies have gained remarkable attention due to their advanced technology readiness level and a sizeable cost reduction in the past years. The value and opportunities most relevant to the installation of electricity storage can be articulated in the following areas:
- FCR (Primary reserves)
- Arbitrage in day-ahead and intra-day markets and,
- aFRR (secondary reserves)
In general, electricity storage is found to be most competitive in markets providing small volumes but high value products with asymmetrical bids and/or a short temporal scope.
The market most suited for electricity storage is FCR (primary reserve), while other markets such as the day-ahead spot market and intraday market may contribute to the income of a storage unit. It is possible to obtain a positive business case from the FCR markets (primary reserve markets) alone, assuming that the asset obtains contracts in all years, as summarised in the table below.