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ID:
192706
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| Summary/Abstract |
Energy storage reduces total operational costs and greenhouse gas emissions on the grid, while enhancing resilience and renewables integration. This makes energy storage a cornerstone in decarbonization planning. However, project developers building new storage systems may be motivated by energy arbitrage and other revenue streams rather than reducing emissions. Using outputs from ReEDS, which optimizes total system cost, this paper investigates the impacts of marginal storage deployment based on competing environmental, financial and grid system operator interests until 2050. Due to economic motivations, storage developers in some Western states may wait and peak new storage installations around 2030, which maximizes profits and reduces emissions. Conversely, new storage projects in Eastern states are more financially attractive today, but will likely increase short-term GHG emissions unless more renewable electricity is added to the grid, requiring policy-based intervention to achieve further long-term GHG emission reductions. The Inflation Reduction Act may reconcile these competing incentives, but more policies are needed to increase storage deployment while maximizing the emission reduction effect of adding storage to the grid. Midwestern and Southeastern states where storage projects could increase emissions will benefit from tax credits under the IRA. Additional credits to accelerate renewables deployment would reduce long-term emissions from storage and realize decarbonization targets faster.
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| 2 |
ID:
176098
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| Summary/Abstract |
The UK's transition to a zero-carbon economy is inevitably leading to an electricity grid with a high penetration of intermittent renewable energy generation, resulting in the need to install grid-scale energy storage systems at an accelerating rate. This study has taken the perspective of a business owner to assess the profitability of deploying battery technologies in the UK electricity market by analysing arbitrage in electricity markets, capacity market auctions, and ancillary services (frequency response and reserve). Additional work was conducted for integrating battery arbitrage cycling with solar and wind generation, comparing the utilisation of a linear programming model against a simplistic threshold cycling model. An overall economic assessment of value streams found that the lowest payback periods for premium ancillary services were 3.3 years (advanced lead-acid battery providing fast reserve) and 6.6 years (lithium-ion battery providing frequency response). Moreover, this research has demonstrated promising returns on investment for stacking short-term operating reserve with arbitrage in the balancing market. In the near future, battery systems will likely attain accelerated deployment due to reforms in ancillary service structures, cost reductions in battery technologies, greater price volatility in the balancing market, and effective policy incentives introduced by the UK government.
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