Modelling of energy storage system in the Australian electricity market

Abstract

With the increasing integration of variable renewable energy, the electricity market supply and demand dynamics is expected to shift accordingly. Consequently, the renewable share in the global total energy mix is predicted to grow substantially over the next decade. This will boost the required capacity for the frequency regulation ancillary services and lead to an increase in variable renewable energy curtailment level if no action is taken. On the other hand, with the advance in the Energy Storage System (ESS) technologies, ESS is expected to play an important role in the electricity market in a high renewable energy penetration future. However, the economic viability of the ESS depends on both the revenue streams of the market applications and its operation cost profile (i.e. calendar life cost and cycle life cost).

In this thesis, we firstly propose a dynamic ESS revenue estimation method and investigate and quantity the ESS’s revenue opportunities in the electricity spot market (price arbitrage) and frequency regulation ancillary service markets while the ESS is assumed to have a quick charge and discharge capability.

While electric vehicle (EV) is gaining more popularity, a collection of retired EV battery packs provides an economic option for meeting the additional frequency regulation needs. We then propose a ESS market operation model that takes into account of both the revenue streams of the spot market and the frequency regulation ancillary service markets, and the ESS operation cost profile (a battery operation cost estimator is built to evaluate the potential impacts of market operations on battery lifespan). Specifically, the model is designed for retired EV lithium batteries under the Australian national electricity market framework.

Finally, a hybrid ESS sizing framework is proposed for the combined wind-storage system. The operation is fully driven by the revenue opportunities including price arbitrage and storing curtailed wind energy and the ESS cost profile. The hybrid ESS sizing framework scales two distinctive types of ESSs (collectively a hybrid ESS) simultaneously and is analysed under different market frameworks and generation mixes.