Techno-economic optimisation of battery storage for grid-level energy services using curtailed energy from wind

Abstract

The increasing integration of renewable energy sources makes balancing an electricity grid challenging due to their intermittency. Renewable energy can be curtailed especially when production exceeds demand or when there are transmission and/or distribution network congestions within a grid. However, curtailment would become unnecessary with battery storage, provided the battery storage has enough available storage capacity, which can store energy during the time of excess generation and in turn discharge it to the grid once the demand is high during peak times. Hence, stored energy from batteries can potentially offset supply from expensive and environmentally harmful peak plants e.g. open/combined cycle gas turbine. We investigated the techno-economic prospects of the utilisation of curtailed energy from the wind with bulk battery storage to replace open and combined cycle gas turbine power plants, by taking the UK as a case study. A techno-economic model to size and optimise a Li-ion type battery was developed. The optimisation aimed to determine at what cost and size the storage can be commercially viable for grid-level energy applications. Results show that under base case assumptions of a 15% day to day curtailment from wind and £200/kWh battery cost, an optimised battery size of 1.25 GWh could supply 285 GWh peak demand per annum and its corresponding net present value of £22.4m, internal rate of return of 1.7% and a payback period of 14 years could be achieved. However, to achieve the internal rate of return of 8%, a minimum hurdle rate for investment, the cost of battery would need to be below £150/kWh. Sensitivity analysis with parameters such as curtailed wind, depth of discharge, battery efficiency, and cost and income of battery shows that all techno-economic parameters considered in this research have a significant impact on the commercial viability of battery storage for grid applications.