Potential revenue and breakeven of energy storage systems in PJM energy markets

The operation in energy arbitrage markets is an attractive possibility to energy storage systems developers and owners to justify an investment in this sector. The size and the point of connection to the grid can have significant impact on the net revenue in transmission and distribution systems. Th...

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Bibliographic Details
Published in:Environmental science and pollution research international 2021-03, Vol.28 (10), p.12357-12368
Main Authors: Salles, Maurício B. C., Gadotti, Taina N., Aziz, Michael J., Hogan, William W.
Format: Article
Language:English
Subjects:
Aquatic Pollution
Arbitrage
Atmospheric Protection/Air Quality Control/Air Pollution
Depreciation
Earth and Environmental Science
Ecotoxicology
Electric Power Supplies
Electricity
Energy industry
Energy storage
Energy transmission
Environment
Environmental Chemistry
Environmental Health
Environmental science
Equipment costs
Life cycle engineering
Life cycles
Markets
Power efficiency
Pricing
Real time
Rechargeable batteries
Research Article
Revenue
Storage systems
Systems developers
Waste Water Technology
Water Management
Water Pollution Control
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Summary:The operation in energy arbitrage markets is an attractive possibility to energy storage systems developers and owners to justify an investment in this sector. The size and the point of connection to the grid can have significant impact on the net revenue in transmission and distribution systems. The decision to install an energy storage system cannot be based only on the cost of the equipment but also in its potential revenue, operation costs, and depreciation through its life cycle. This paper illustrates the potential revenue of a generic energy storage system with 70% round trip efficiency and 1–14 h energy/power ratio, considering a price-taking dispatch. The breakeven overnight installed cost is also calculated to provide the cost below which energy arbitrage would have been profitable for a flow battery. The analysis of the potential revenue was performed for 13 locations within the PJM Real-time market. We considered hourly data of day-ahead and real-time locational marginal prices over 7 years (2008–2014). Breakeven installed cost per MW ranged from $30 (1 MW, 14 MWh, 2009) to $340 (1 MW, 1 MWh, 2008).
ISSN:0944-1344
1614-7499
DOI:10.1007/s11356-018-3395-y