The more variable renewable energy there is in the grid, the higher the value of utility-scale storage systems. Researchers from the Massachusetts Institute of Technology (MIT) have used a high temporal resolution capacity expansion model called GenX to determine the least-cost approach to deploying large-scale storage into a low-carbon power system.
Lead-author and research scientist at the MIT Energy Initiative, Dharik Mallapragada, and his colleagues published their results in the journal article, Long-run system value of battery energy storage in future grids with increasing wind and solar generation, which appeared in the academic periodical Applied Energy.
In this research, the team attempted to identify the various sources of value generation that a storage system can tap into and the respective economic dynamics connected to these value sources. The most significant source of value for battery storage assets is the subsequent capacity deferral. Where a grid operator installs battery storage capacity, expensive transmission line capacity or natural gas plants can be avoided.
“Battery storage helps make better use of electricity system assets, including wind and solar farms, natural gas power plants and transmission lines, and that can defer or eliminate unnecessary investment in these capital-intensive assets,” says Mallapragada. “Our paper demonstrates that this capacity deferral, or substitution of batteries for generation or transmission capacity, is the primary source of storage value.”
To come to this conclusion, the researchers analyzed the holistic system value of energy storage. Specifically, the team looked at two variants of abstract power systems in the U.S.’ Northeast and Texas regions. To this end, information on load profiles and generation data for variable renewable energy was consistent with real-world figures.
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