Proceedings of the International Renewable Energy Storage and Systems Conference (IRES 2023)

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Efficient Estimation of Upper Bounds on Arbitrage Values for Energy Storage Devices

Authors
Robert J. Barthorpe1, *
1Department of Mechanical Engineering, The University of Sheffield, Sheffield, United Kingdom
*Corresponding author. Email: r.j.barthorpe@sheffield.ac.uk
Corresponding Author
Robert J. Barthorpe
Available Online 11 July 2024.
DOI
10.2991/978-94-6463-455-6_3How to use a DOI?
Keywords
Storage Metrics; Energy Arbitrage; Optimisation Tools
Abstract

Achieving flexibility through energy storage will be a key element in the transition to a low carbon energy grid. Decision making around investment in energy storage assets is a challenging task, and is typically reliant upon evaluating the expected performance of the planned asset on the basis of a set of economic metrics. The levelised cost of storage (LCOS) is one such metric, although significant limitations have been recognised, not least that temporal characteristics are not included. This means that the arbitrage value that may be achieved by the store - in the general case that charging and discharging prices vary over time - cannot be represented, with standing losses also not straightforwardly included. A potential solution is presented by the net present value (NPV) metric. The NPV describes the discounted present value of an asset considering both costs and revenue streams. As such, it offers a means of incorporating temporal behaviour including arbitrage value into the value calculation. This paper focuses on the development of a highly efficient method for estimating an upper bound on the arbitrage value that may be achieved by a given storage device, such that it may be included with the NPV metric.

Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Renewable Energy Storage and Systems Conference (IRES 2023)
Series
Atlantis Highlights in Engineering
Publication Date
11 July 2024
ISBN
10.2991/978-94-6463-455-6_3
ISSN
2589-4943
DOI
10.2991/978-94-6463-455-6_3How to use a DOI?
Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Robert J. Barthorpe
PY  - 2024
DA  - 2024/07/11
TI  - Efficient Estimation of Upper Bounds on Arbitrage Values for Energy Storage Devices
BT  - Proceedings of the International Renewable Energy Storage and Systems Conference (IRES 2023)
PB  - Atlantis Press
SP  - 12
EP  - 19
SN  - 2589-4943
UR  - https://doi.org/10.2991/978-94-6463-455-6_3
DO  - 10.2991/978-94-6463-455-6_3
ID  - Barthorpe2024
ER  -