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Economic Modeling of Compressed Air Energy Storage
Midwest Independent Transmission System Operator (MISO), Inc., St. Paul, MN 55108, USA
Department of Electrical and Computer Engineering, Iowa State University, Ames, IA 50010, USA
State Grid Electric Power Research Institute, Nanjing, Jiangsu 210000, China
* Author to whom correspondence should be addressed.
Received: 24 January 2013; in revised form: 26 February 2013 / Accepted: 21 March 2013 / Published: 18 April 2013
Abstract: Due to the variable nature of wind resources, the increasing penetration level of wind power will have a significant impact on the operation and planning of the electric power system. Energy storage systems are considered an effective way to compensate for the variability of wind generation. This paper presents a detailed production cost simulation model to evaluate the economic value of compressed air energy storage (CAES) in systems with large-scale wind power generation. The co-optimization of energy and ancillary services markets is implemented in order to analyze the impacts of CAES, not only on energy supply, but also on system operating reserves. Both hourly and 5-minute simulations are considered to capture the economic performance of CAES in the day-ahead (DA) and real-time (RT) markets. The generalized network flow formulation is used to model the characteristics of CAES in detail. The proposed model is applied on a modified IEEE 24-bus reliability test system. The numerical example shows that besides the economic benefits gained through energy arbitrage in the DA market, CAES can also generate significant profits by providing reserves, compensating for wind forecast errors and intra-hour fluctuation, and participating in the RT market.
Keywords: co-optimization; compressed air energy storage; economic dispatch; wind energy; unit commitment
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MDPI and ACS Style
Gu, Y.; McCalley, J.; Ni, M.; Bo, R. Economic Modeling of Compressed Air Energy Storage. Energies 2013, 6, 2221-2241.
Gu Y, McCalley J, Ni M, Bo R. Economic Modeling of Compressed Air Energy Storage. Energies. 2013; 6(4):2221-2241.
Gu, Yang; McCalley, James; Ni, Ming; Bo, Rui. 2013. "Economic Modeling of Compressed Air Energy Storage." Energies 6, no. 4: 2221-2241.