Economic Value of Li-ion Energy Storage System in Frequency Regulation Application from Utility Firm’s Perspective in Korea

Energies

Wonchang Hur⁵  Yongma Moon³  Kwangsup Shin⁴  Wooje Kim²  Suchul Nam¹  Kijun Park¹ 

[1] KEPCO Research Institute, Daejeon 305760, Korea; E-Mails:;College of Business and Technology, Seoul National University of Science and Technology, Seoul 139743, Korea; E-Mail:;College of Business Administration, University of Seoul, Seoul 130743, Korea;Graduate School of Logistics, Incheon National University, Incheon 406772, Korea; E-Mail:;College of Business Administration, Inha University, Incheon 431050, Korea; E-Mail:

关键词: energy storage system;    economic value;    utility firm;    frequency regulation;    ancillary services;   

DOI  :  10.3390/en8065000

来源: mdpi

【 摘 要 】

Energy Storage Systems (ESSs) have recently been highlighted because of their many benefits such as load-shifting, frequency regulation, price arbitrage, renewables, and so on. Among those benefits, we aim at evaluating their economic value in frequency regulation application. However, unlike previous literature focusing on profits obtained from participating in the ancillary service market, our approach concentrates on the cost reduction from the perspective of a utility firm that has an obligation to pay energy fees to a power exchange. More specifically, we focus on the payments between the power exchange market and the utility firm as a major source of economic benefits. The evaluation is done by cost- benefit analysis (CBA) with a dataset of the Korean market while considering operational constraint costs as well as scheduled energy payments, and a simulation algorithm for the evaluation is provided. Our results show the potential for huge profits to be made by cost reduction. We believe that this research can provide a guideline for a utility firm considering investing in ESSs for frequency regulation application as a source of cost reduction.

【 授权许可】

CC BY   
© 2015 by the authors; licensee MDPI, Basel, Switzerland.