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E.P.B. has contributed in the UC model development, implementation of this model in AMEBA, preparation of databases, and simulations. He also participated in the development of the proposed methodology and the literature review.

R.P.B. participated in the development of the proposed methodology and the overall revision of the paper.

This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution license (

Despite the increasing interest in Energy Storage Systems (ESS), quantification of their technical and economical benefits remains a challenge. To assess the use of ESS, a simulation approach for ESS optimal sizing is presented. The algorithm is based on an adapted Unit Commitment, including ESS operational constraints, and the use of high performance computing (HPC). Multiple short-term simulations are carried out within a multiple year horizon. Evaluation is performed for Chile's Northern Interconnected Power System (SING). The authors show that a single year evaluation could lead to sub-optimal results when evaluating optimal ESS size. Hence, it is advisable to perform long-term evaluations of ESS. Additionally, the importance of detailed simulation for adequate assessment of ESS contributions and to fully capture storage value is also discussed. Furthermore, the robustness of the optimal sizing approach is evaluated by means of a sensitivity analyses. The results suggest that regulatory frameworks should recognize multiple value streams from storage in order to encourage greater ESS integration.

Energy targets and support policies have acted as a driving force in the increased adoption of renewable energy. Furthermore, it is expected that the share of electricity generation from variable renewables—such as wind, photovoltaic, tidal and wave power—will continue to increase rapidly [

ESS are suitable for several applications to support integration of renewable energy. In [

Despite increasing interest in ESS, quantification of the technical and economic benefits for each application remains a challenge and major barrier to their acceptance and development of ESS [

The particular challenge of assessing bulk ESS optimal size is to take into account for all the relevant factors. These can be divided into short and long-term effects. In the first cases, short-term, integration of ESS increases short-term system operation flexibility, permitting a greater participation of renewables, whilst also reducing impacts on conventional power plants. Economic assessments of such effects is carried out using realistic and detailed short-term simulations, characterizing the charging-discharging process and the impacts on the rest of the system. Technical operational constraints and intraday power variability modeling for renewable resources are necessary to accurately understand the benefits, which are included in the Unit Commitment (UC) formulation [

At the same time, the contributions of ESS to power systems may also vary from one year to another. The development of the electricity sector (electricity demand, generation mix according to renewable energy targets, and fuel costs) will play a key role in their future contribution. The benefits of storage—and consequently its optimal size—therefore depend on the specific year evaluated, making a long-term horizon necessary. To determine the optimal ESS sizing, the balance of investment costs and the resulting savings on the system's operating costs should be calculated over a long-term horizon, which could range from five to thirty years, depending on the technology's lifespan. The system future development could also involve other initiatives such as demand-side management, improved forecasting, cross-border interconnections or flexible generating technologies (hydro o natural gas units) that may impact its flexibility. Such initiatives would also affect the future contribution of ESS and a long-term evaluation, therefore, needs to be considered.

Moreover, since storage can simultaneously provide multiple services, different value streams must be taken into account in order to accurately estimate the potential benefits of ESS. In this case, the control strategies evaluated must reflect storage limitations to provide multiple services. The joint provision of different services (co-optimization) can be expected to yield a better return on investment than single-purpose use, thereby increasing the value of the ESS.

The contribution of the present work comprises a simulation approach to optimal ESS sizing, based on an adapted Unit Commitment formulation that includes ESS operational constraints [

It demonstrates the importance of long-term evaluations rather than current state-of-the-art approaches, which consider a single year when determining optimal ESS sizing. A realistic test-bed is used to determine optimal storage size for the Chile's Northern Interconnected Power System (SING). Additionally, it is shown that optimal size depends on the services provided by the ESS, such as primary, and secondary reserves, and energy arbitrage. Recognition of multiple value streams for storage increases its economic value, and therefore, encourages greater integration of ESS into the grid.

The paper is organized as follows: Section 2 presents a review of existing approaches to optimal ESS sizing. The proposed evaluation framework is presented in Section 3, and the results of computational simulation are presented and discussed in Section 4. Finally, Section 5 sets out the conclusions of this work.

Different approaches to assessing the value of ESS and determining optimal size—rated power and energy—in a given system can be found in the literature. Endogenous models that optimize ESS size are found in [

On the other hand, simulation approaches to studying the value and the optimal sizing of storage can be found in [

In order to carry out a detailed assessment of the feasibility, reliability, and economics of including ESS in the power system operation, some authors have proposed a detailed chronological simulation approach on a daily basis (365 UCs) with a resolution of one hour [

The evaluation framework presented in this paper uses HPC capabilities to run several UC simulations for multiple ESS configurations. By comparing the total investment and savings in operational costs for several ESS configurations and services, the optimal ESS size is determined.

As shown above, none of the previous approaches has simultaneously addressed all the relevant aspects of evaluating optimal ESS size. In this paper, a simulation framework is presented in order to maintain detailed representation of short-term system operation over a long-term horizon whilst keeping solution times trackable. It considers UC simulations with an hourly resolution for selected representative days. Representative days are selected in such a way as to represent yearly operation, characterizing and summarizing the system's cycling pattern observed in demand and wind and solar radiation and to maintain representation of short-term operational characteristics. The aim is to achieve a trackable solution time whilst also extending the cases under analysis. The UC simulation includes inter-temporal units and technical constraints as well as system security constraints, permitting adequate representation of the ESS daily cycle as well as the seasonal and intra-day stochastic variability of renewable energy.

Similarly to [

The proposed UC model

Subject to the following constraints:

Wind and solar spillage is considered explicitly in the model

When incorporating ESS into the UC problem _{t}_{t}

In case that the ESS provides jointly energy arbitrage and spinning reserves, constraints

The model assumes that the ESS is capable to change, in a short interval, between charge/discharge modes, so the ESS is able to participate in the provision of spinning reserves on a greater extent. Theoretically, the ESS may provide twice their power capacity for either up or down spinning reserve. Constraints

Since ESS has a limited energy capacity to provide these scheduled reserves if they are activated during real time operation, sufficient energy has to be stored to provide down reserves for over-frequency compensation. Likewise, during under-frequency events, a minimum energy level is required to provide up reserves. This is implemented by constraints

The present model

Due to computing capabilities, long-term system expansion planning has traditionally been carried out considering weekly or monthly intervals and load duration curve approximations, thereby losing the capability to model UC short-term operational constraints such as start-up costs, ramp rates and minimum up-and-down times [

Long-term system operation planning including short-term constraints and hourly resolution could result in prohibitive computing times. Therefore, it is a challenge to combine the necessary temporal granularity to accurately represent storage and short-term system operation—especially when evaluating short-term storage—and long-term expansion planning. These challenges for determining optimal storage size are addressed in the evaluation framework presented here by using representative days and HPC.

Using the proposed methodology it is possible to carry out the analysis of different scenarios in a reasonable period of time while considering: different ESS configurations (rated power, storage capacity, technologies and services) and performing several sensitivity analyses that include different renewable energy targets, future generation mix, and the long-term fuel price outlook.

The evaluation framework used in this paper to determine optimal sizing of ESS in a particular power system is illustrated in

The proposed methodology can be summarized as follows:

An expansion plan for the system is determined, including generation mix for each year, future fuel costs and system demand growth. Size—energy and power—and service provision for the ESS are evaluated.

For each year, scenarios of hourly wind energy, solar energy, energy demand, and generation units maintenance programs are generated, based on historical data and clustering. This is carried out according to installed capacity depending on the generation mix for that year. The energy demand is scaled every according to expected annual energy growth.

UC simulations are performed for all the representative scenarios using HPC according to the methodology illustrated in

Steps 2 and 3 are repeated for each year of the evaluation horizon.

Steps 1–4 are repeated for several ESS sizes and services (energy arbitrage, primary and secondary reserve). Different expansion plans and fuel costs can also be incorporated for particular sensitivities in order to explore the robustness of the decision.

A summary of total ESS investment and system operating costs is drawn up for every ESS size and service under analysis.

This framework permits simultaneous analysis of different scenarios, depending on the available nodes of the HPC cluster, thereby facilitating determination of optimal ESS sizing. This approach can be used directly in thermal systems since operation in a given year does not impact operation in the following year. In the case of hydrothermal systems, where operation for several years is bundled, a considerable increase in computing time can be expected. However, an HPC approach is still suitable in this case, contributing to detailed analysis of ESS integration.

The benefits of including ESS in the power system operation are determined by means of a trade-off analysis. Investment costs are compared to a reduction in operational costs in the long-term (a 10 years evaluation period). The UC formulations

The proposed methodology can be improved through the usage of traditional derivate-based optimization, surface response approaches or by implementing other type of algorithms to avoid exploring the entire spectrum of energy/power configuration for ESS. Nevertheless, HPC infrastructure enabled the evaluation of a large range of configurations without compromising solution time. In any case, it is important to remark that global optimal solution cannot be guaranteed, only local optimal values where founded in all study cases.

As stated, the total investment costs and operational savings are crucial factors for optimal ESS sizing. In this way, ESS configuration is selected through maximization of social welfare understood as balance of investment cost and consequent savings in operational costs. In every case, annuity of investment cost and operational savings are included to determine the net present value of the cash flow considering a rate of discount of 10%.

The HPC infrastructure used for this study is part of the Center for Mathematical Modeling (CMM) and comprises 66 nodes, each equipped with two quad-core Intel Xeon X5550 processors running at 2.67 GHz (each computer node has eight physical cores) and 24 GB RAM [

Computational simulations were carried out for the SING which is a thermal isolated system and a centralized cost-based market. In 2012, the SING had a peak load of 2167 MW and energy generation was divided into coal (82%), natural gas (14%) and diesel (3%), with hydro and cogeneration accounting for the other 1%. Coal units exhibit large up/down time and a high minimum stable operating point, without cross-border interconnections. In the SING, there are also a larger number of diesel/fuel-oil units, incorporated in response to past uncertainty about fuel availability. Currently, the grid has two lithium-ion storage plants, totaling 32 MW, which were developed by A123 Systems. They are designed to maintain output for 15 minutes and provide primary reserve to support system frequency control [

Since mining companies account for 90% of electricity demand in the SING, its demand profile is unusually flat, with only small differences between peak and off-peak hours. Moreover, since no wind or solar power generation as yet exists, intra-day variability is low. In the following years, and mainly due to increasing number of mining processes in the area, the SING demand is expected to grow by 4% to 8% per year [

Chile is debating renewable targets in order to reduce carbon emissions, aiming for a renewable portfolio standard of 20% by 2024. The SING is, moreover, in a geographical area with exceptional solar radiation, windy areas and nearby geothermal reservoirs. Over the coming years, renewable energies are, therefore, expected to become an important part of its matrix, as illustrated in

Since the generation sector is considered as a competitive market in Chile, future generation mixes cannot be assured for the following years. From all the eligible technologies that can be incorporated into the SING, the generation companies will invest in those that result to be more competitive to supply demand. This work considered two feasible scenarios for the future generation mix: 10% of renewables by 2024 or 20% of renewables by 2024 [

For the particular case analyzed here, a total of 108 representative days were used to approximate 365 operating days. The clustering was performed following the presented methodology, considering 36 consecutive days. Each year was split into three seasons: summer, fall-winter and spring, permitting characterization of the seasonal behavior of wind speed and solar radiation in the region. The Atacama Desert has the planet's highest level of solar radiation, with very predictable resources, so solar power profiles are considered deterministic, seasonally variable and uniform throughout the region.

The period used to assess the benefits of incorporation of ESS in the SING is from 2020 (when ESS is assumed to be installed) through to 2030. ESS integration in short-term operation planning is analyzed for three kinds of services—primary and secondary reserve provision and energy arbitrage—which are integrated into the UC formulation following [

The results presented below summarize more than 260,000 optimizations carried out for different ESS configurations, services and renewable energy targets. The optimal ESS configuration is selected by maximizing social welfare defined as the balance of investment outlay and the resulting savings on operating costs. An evaluation of investment costs for each particular ESS configuration is discussed in order to make the methodology suitable for different ESS technologies.

Spinning reserve provision by generating units entails its partial loading, in order to compensate for shortfalls/surpluses in generation/demand and maintain system frequency in a specified band. ESS reserve provision permits the shift of generators' unloaded spare capacity to energy production, increasing overall system efficiency. This is, in fact, the case of the two existing ESS systems in the SING, installed for the provision of primary reserve.

To study the benefits of ESS for this purpose, eight cases of power capacity—10, 20, 30, 40, 50, 60, 70 and 80 MW—are studied. According to current SING security standards, primary reserves must be deployed within ten seconds of a disturbance in frequency, and maintained for a maximum of twenty minutes. This determines the minimum MWh storage capacity needed in each case, depending on the rated power installed.

In order to evaluate the optimal ESS size for providing primary reserve, the net social benefit is calculated as cost savings minus investment outlay. A 10% discount rate and a life expectancy of ten years are assumed, the latter as an average value for technologies such as Li-ion or NaS [

For the sake of simplicity in presenting the results, the investment cost of power capacity is assumed fixed at 400 USD/kW, and no assumptions are made about the relationship in between power and energy capacities as expected in some chemical batteries. The cost of providing primary reserve and satisfying the technical requirements for deploying and maintaining the response in MW for 20 min is obtained as follows:

In

For a given ESS technology with a fixed power to energy relationship, it is still possible to evaluate their optimal size by obtaining the equivalent cost. For instance, for current primary reserve requirements of 20 min at rated power, a power-to-energy ratio of three is needed. If a given battery chemistry with a cost of 1500 USD/kWh has a ratio of six, this means that its rated power can only be maintained for ten minutes. Thus, the ESS should be dimensioned with twice the capacity, giving an equivalent cost of 3000 USD/kWh. With this correction, according to

It is important to note that the range of benefits—0.2% to 1.4%—is greater than the solver tolerance used in this work for mixed integer optimizations (MIP gap). This is crucial in order to obtain a reliable estimate of such a small difference in operating costs. Using an optimization model that solves larger but simplified problems calls for the relaxation of the MIP gap in order to maintain practical execution times. In contrast, the use of a simulation approach based on HPC allows the use of greater modeling detail, as well as a smaller MIP gap solver tolerance. In any case, is important to maintain a MIP gap smaller than reductions in operating costs (in percentage terms) to preserve confidence in the results.

Joint provision of energy arbitrage and ancillary services is also studied. In this case, the evaluation considers six power capacities (50, 100, 150, 200, 250 and 300 MW) with storage capacity ranging from one hr to twelve hrs. Since evaluation focuses in grid scale sizes, PHS is considered as the target technology since it offers a number of advantages for provision of grid scale storage and maturity.

Costs for PHS are very site-specific, ranging from 450–2500 USD/kW and 5–60 USD/kWh [

As expected, optimal ESS size for the provision of energy and secondary reserve depends on the capital costs of ESS.

When considering a higher investment cost—for example, 1000 USD/kW—the optimal ESS size changes, as shown in

In order to explore how optimal ESS size changes, a sensitivity analysis for different investment costs is shown in

In this analysis, one of the costs of power/energy capacity is fixed to facilitate understanting and presentation of the results. Since the capital cost of power capacity is greater in PHS, the cost of energy capacity in this case is fixed at 20 USD/MWh. Thus, for a given investment cost of power capacity in USD/kW, an optimal ESS configuration—rated power and storage capacity—is determined.

It can be seen that optimal size increases—both in power and energy capacity—as investment costs drop.

Use of ESS to provide multiple services increases their competitiveness. Simulations show that in the case of an ESS providing only energy arbitrage, social benefits tend to decrease dramatically.

Recognition of multiple value streams from ESS is relevant when evaluating the convenience of storage in a particular system. Although ESS can deploy technically different services, each power system's regulatory framework must recognize and foster these capabilities. This will yield greater benefits to the system, resulting in a more efficient incorporation of ESS into the grid.

In order to estimate monetary benefits, system operation modeling must internalize the capability to provide multiple services and also take into account the technical limitations of particular technologies. For instance, when providing operating reserves, it is crucial to determine availability of the energy stored so as to be sure that the ESS can provide the reserve in real time operation when this is required.

The energy sector's future development is currently being debated in the context of public policies to reduce carbon emissions. The case of a target of 10%, rather than 20%, for variable renewables—solar and wind—as a percentage of total electricity generation by 2024 is, therefore analyzed. The results for an ESS jointly providing energy and secondary reserve are shown in

Hence, the future development of the energy matrix has a very important impact on the amount of storage needed. In this case, the incorporation of renewable energy, principally solar and wind technologies, in the SING will add variability to its operation. The incorporation of variable resources encourages the inclusion of storage technologies to manage variability and lack of predictability, thereby increasing the value of storage. As shown, this will depend on a number of variables that must be taken into account when evaluating the value of storage and determining optimal ESS incorporation. These variables include the future development of the energy matrix, cross-border interconnection, demand-side management and the evolution of fuel prices.

A multiple-year horizon is relevant in assessing optimal storage size since the energy matrix will see a shift to variable renewable energy over the coming decade. A detailed comparison of optimal ESS sizes obtained for different evaluation horizons is, therefore, presented. The multiple year evaluation—whose results were presented in Section 4.3–4.5—is compared with a single-year horizon (2020). The single-year evaluation considers only the cost savings of that year and the annuity of capital costs while the multiple-year evaluation uses present value with a 10% discount rate as discussed above.

In the case of primary reserve services,

In this case, the results indicate that, for an investment cost of 1000 USD/kW, the optimal size obtained in a ten-year evaluation will increase by 50% (25 MUSD) as compared to the results obtained using a one-year evaluation period.

Analysis of the contribution of ESS in the long term is important since optimal sizing depends on this evaluation. A one-year approach could lead to a sub-optimal long-term planning decision. If results for a one-year simulation produce an over-estimation of the expected long-term benefits, this will lead to sub-optimal storage overcapacity.

In addition to determining optimal ESS sizing, the methodology presented here permits analysis of different technical effects related to short-term operation and its expected evolution as the energy sector develops in the future

The incorporation of more renewables into the grid will affect the current operation of traditional generating units. In systems with a high participation of thermal units, flexibility is crucial in real-time operation.

This paper presents a simulation approach to the determination of optimal ESS sizing, based on UC simulations, suggested adaptations and the use of HPC. The ability to run UC simulations in parallel by using HPC infrastructure permits analysis of multiple years, using a detailed short-term system operation model. This, in turn, permits analysis of the inclusion of ESS in short-term operation and its contribution in the long term. Using the simulation framework presented, it is possible to determine the impacts of ESS and compare technologies for different applications.

Computational simulations were carried out for Chile's Northern Interconnected Power System (SING). The results show the importance of evaluating ESS in the long term. The particular evaluation of the SING indicates that optimal solutions for a given generation mix could lead to sub-optimal development of storage in other conditions. ESS configuration is, in other words, extremely dependent on the future incorporation of renewables in northern Chile. Similarly, multiple-year evaluation is found to be crucial for adequate assessment of ESS contributions. This paper presents valuable results, suggesting that the regulatory framework should recognize multiple value streams from storage in order to encourage greater integration of ESS into the grid. The authors show the importance of performing detailed simulation for several years, using the methodology presented, so as to fully capture storage value and of performing particular sensitivity analyses to explore the robustness of the decision.

Future work will focus on the impacts of operating policy in ESS lifetime expectancy for a more accurate assessment. Further analyses of the lifespan of ESS should be carried out depending on the storage technology considered. To clearly determine the value of storage, the impact of ESS on the future development of transmission and avoided generating facilities should be incorporated.

The authors want to thank the partial support of the Ministry of Energy, Government of Chile, under the project named “Sistemas de almacenamiento de energía para habilitar la integración de ERNC”, 2012, D.E.0593-2011 and the supercomputing infrastructure of the NLHPC (ECM-02). Likewise, R.P.B would like to thank the partial support of CONICYT/FONDAP/15110019 and FONDECYT Grant 1120317. C.S.M thanks the CIGRE National Working Group named “Energías Renovables No Convencionales. Incorporación de ERNC en los Sistemas Eléctricos Nacionales.”

The authors declare no conflict of interest.

_{ess}

Power capacity of ESS in MW

_{ess}

Energy capacity of ESS in MWh

_{total}

Total ESS investment cost

_{mw}

Cost of power capacity in USD/MW

_{mwh}

Cost of energy storage capacity in USD/MWh

_{dept}

Minimum deployment time for primary reserve in minutes

Set of all generation units,

Sub set of slow start units. GSL

Sub set of fast start units

Set of all ESS,

Maximum capacity limit for generator

Minimum capacity limit for generator

_{g}

Variable cost generator

Start-up cost generator

Stop cost generator

Up ramp limit generator

Down ramp limit generator

Available wind power, hour

Available solar power, hour

_{t}

System load, hour

Maximum storage capacity, ESS

Minimum required level stored energy, ESS

Maximum discharge capacity, ESS

Maximum charge capacity, ESS

_{d}, e

Discharge efficiency, ESS

_{c}, e

Charge efficiency, ESS

_{t}, g

Power output, generator g, hour

Up spinning reserve, generator g, hour

Down spinning reserve, generator g, hour

Non-spinning reserve, generator g, hour

_{t}

Wind power output, hour

_{t}

Solar power output, hour

_{t}

Wind power spillage, hour

_{t}

Solar power spillage, hour

_{t}

Unserved energy, hour

_{t}, e

Energy stored, ESS

_{t}, e

Charging level, ESS

_{t}, e

Discharging level, ESS

Up spinning reserve, ESS

Down spinning reserve, ESS

_{t}, g

Unit Commitment, generator

_{t}, g

Start-up flag, generator

Turn-off flag, generator

_{op}

_{t}, g

Operation cost, generator

_{start}

_{t}, g

Start-up cost, generator

_{stop}

_{t}, g

Shut-down cost, generator

_{ENS}

_{t}

Unserved energy cost, hour

Clustering and optimization.

Evaluation framework for optimal ESS sizing.

Expected generation mix in the SING in 2013–2025.

Yearly cost reductions obtained for ESS for primary reserve provision.

Optimal ESS sizing for primary reserve provision.

Social benefits (MUSD) of ESS inclusion for energy arbitrage and secondary reserve provision (500 USD/kW–20 USD/kWh).

Social benefits (MUSD) of ESS inclusion for energy arbitrage and secondary reserve provision (1000 USD/kW–20 USD/kWh).

Optimal ESS sizing for energy management and secondary reserve provision for different investment costs in USD/kWh.

Social benefits (MUSD) of ESS inclusion for energy arbitrage provision (500 USD/kW–20 USD/kWh).

Optimal ESS sizing when changing renewables energy target to 10% by 2024.

Reduction in weekly start-up of CCGT units.

ESS optimal sizing for different evaluation horizons for primary reserve provision.

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ESS optimal sizing for different evaluation horizon for energy arbitrage and secondary reserve provision.

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