Economic Benefit of Energy Storage System for Frequency Regulation

To address the environmental concerns throughout the world, many new power sources, such as renewable energy, are being introduced. In order to maintain the reliability and stability of the system while integrating these inputs, many systems have started integrating battery energy storage systems. However, the introduction of such system has been very slow due to its high capital costs. Therefore, the economic benefit of a lithium ion battery energy storage system used for frequency regulation in a utility company is analyzed. The profit of a utility is calculated in terms of reduced amount of power purchase cost, and the results verify that the utility is able to recover their investments within the life cycle of the storage system in all cases.