Stacking Battery Energy Storage Revenues in Future Distribution Networks

Abstract

Distribution system operators are attracted to battery energy storage systems (BESS) as a smart option to support the distribution network. However, due to its high capital cost, BESS profitability is dependent on the participation in multiple services to stack revenues and rationalize their existence. Yet, revenue stacking is location-dependent based on the available services and regulations. In this paper, specific revenue stacking frameworks are proposed for BESS installed in modern distribution networks that consider the conflicts and synergies that may occur from the involvement in multiple services in practice. A simple yet effective sizing formulation is introduced to find the BESS system size based on the primary service which is to solve the distribution network violations. BESS scheduling is simulated in accordance with the proposed frameworks to maximize the stackable profits for a case study of Northern Ireland. The BESS profitability is investigated through cost-benefit analyses of different technologies for the sole and stacked services. The results show that revenue stacking can boost the annual revenues by 129% with a payback period of 8 years on average. The presented insights are useful for network operators and energy investors in understanding and assessing the profitability of different BESS technologies for various applications.

Service stacking using energy storage systems for grid applications – A review

“…• Aggregator agent controls BESS to provide both active and reactive power support to the grid when the local behind-the-meter BESS is not used • Smaller BTM BESS can be successfully used to support upstream congestions and also to support the local voltage quality without affecting the customers own electricity optimization [113] Various BESS Optimized Optimized Congestion relief Energy arbitrage Frequency regulation…”

Considerations for benefit stacking policies in the EU electricity storage market

“…Unlike other energy activities, in which there is a main discernible activity to provide the value, electricity storage value can be created through multiple services provided by storage asset managers to different actors in different markets. When the same storage facility can provide more than one service in a reduced time scale and potentially to different markets, this is called benefit or revenue stacking (Mohamed et al, 2022). Benefit Stacking can also be defined as "the bundling of multiple grid services together to improve the economics of a storage project" (McPhail, 2019).…”

Battery Energy Storage Systems for the New Electricity Market Landscape: Modeling, State Diagnostics, Management, and Viability—A Review

“…In situations where the renewable energy supply exceeds the demand or grid capacity, a BESS can absorb the excess energy and store it for later use. By avoiding curtailment, valuable renewable energy resources are preserved and can be utilized effectively.‚Distribution grid upgrade deferral[250,252,[261][262][263]: Batteries deployed at the distribution level can defer or avoid the need for costly upgrades to distribution infrastructure. By storing and releasing energy as required, batteries can help manage local demand and supply imbalances, reduce grid congestion, and improve the overall efficiency and reliability of the distribution grid.‚Transmission grid upgrade deferral[264][265][266]: Similarly, batteries located at the transmission level can defer or eliminate the need for costly transmission grid upgrades.…”