Cost and benefit analysis of storage technology opportunities in wind power curtailment and time-shift benefit for wind farms

Abstract

The integration of renewables in electricity systems and urban areas loads have resulted in a wide daily price variation with overnight and off-peak prices which are far less than the prices in peak times or high demand period. The high difference in electricity prices makes it desirable to capture through some storage (technological) solution by storing cheap electricity at off-peak hours and sell that in high demand or peak hours. Different storage technologies provide this solution currently with a reasonably high initial/capital cost, minimal operation & maintenance cost along with low environmental impacts. As the cost of solar panels and wind turbines continues to come down, the return on investment (ROI) and payback period paradigms looks more promising for adding renewables which still is not the case of large (utility) scale storage technologies, despite its potential role and benefits in the electricity supply chain. This study highlights the important aspects of storage technology implementation in renewable energy sector of Spanish electricity market especially in the presence of special regime prices, to evaluate it economic justification for different applications particularly the time-shift benefit in contrast with the market prices. For this purpose the outcomes of a custom build model are analysed which are based on several inputs from the electricity market i.e. production data, different electricity prices and observed cost ranges with respect to different storage technologies (most of which are based on the previous studies in this field. The pumped hydro option was analysed to check how much gain the storage technologies are not obtaining in operational integration with wind farms. Based on these results it was found that due to (mostly) economic (high capital costs and FiT pricing) barriers the storage technologies are far from achieving the breakeven at large scale utility applications especially in time-shifting mechanism and renewables. There are some progressing technologies with better technical and future cost reduction likelihood which can achieve the breakeven or pay back within its life time but that mostly depends on the drastic reduction in cost through market competition, innovation and regulatory and monetary support from governments. Without these factors the progress in making storage as a permanent part of electricity infrastructure might not be realized in short or medium term.