Comprehensive economic assessment of grid-scale energy storage system in power spot market

Energy storage systems (ESS) had been developed over the last decade in terms of technologies, costs and applications. As the relatively new participant in the power market, economy of ESS is one of the most concerned issues for asset developers, government decision-makers and market designers. In the paper, a comprehensive method of economic assessment of ESS in power spot market is proposed. On the one hand, societal economic benefit is evaluated in terms of renewable accommodation, market price, electric user payment, etc. On the other hand, economic benefit of developer owned ESS is also assessed in terms of energy revenue, pay-back year. A chronological market simulation model with security constraint unit commitment and economic dispatch is designed to simulate clearing and operation of the power spot market with ESS. The simulated locational marginal price, ESS charging and discharging schedule and other market variables are applied for quantification of the economic indices representing the impact of ESS on the power spot market. A case study using an actual provincial power spot market shows that the proposed method can quantify societal and developer’s economic benefit.