An Economic Analysis of Load Leveling with Battery Energy Storage Systems (BESS) in an Electricity Market Environment: The Korean Case

The capacity of battery energy storage systems (BESS) is expected to increase for power system applications. However, as the cost of BESS is high, economic feasibility must be considered when using BESS in grid applications. Load leveling with BESS is one such application for which the economic impl...

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Bibliographic Details
Published in:Energies (Basel) 2019, Vol.12 (9), p.1608
Main Authors: Kim, Hyung Tae, Jin, Young Gyu, Yoon, Yong Tae
Format: Article
Language:English
Subjects:
Alternative energy sources
battery energy storage systems (BESS)
Case studies
Cost control
Cost function
Economic analysis
Electric industries
Electric power systems
Electrical loads
Electricity
Electricity distribution
Electricity generation
electricity market
Electricity pricing
Energy storage
Load
load leveling
Net present value
Prices
Public utilities
Storage systems
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Summary:The capacity of battery energy storage systems (BESS) is expected to increase for power system applications. However, as the cost of BESS is high, economic feasibility must be considered when using BESS in grid applications. Load leveling with BESS is one such application for which the economic implications have been analyzed in the literature. However, these studies do not sufficiently consider the fact that the leveled loads will lead to a change in electricity prices, thereby modifying charging/discharging operations of BESS. Additionally, in a competitive electricity market, electricity prices are not determined by the generator cost functions. Market participants’ strategic decisions also affect prices. Therefore, we conducted an economic analysis of load leveling with BESS in an electricity market from the perspective of a utility company and/or a government agency. In our analysis of the Korean market, we examine whether the leveled loads necessarily lead to economic benefits. Load leveling performance and the associated economic benefit are quantitatively analyzed for varying sizes of BESS. Further, the policy implications related to using BESS are derived from the analysis results.
ISSN:1996-1073
1996-1073
DOI:10.3390/en12091608