Integrating high share of renewable energy into power system using customer-sited energy storage

Renewable energy has rapidly advanced in the global energy system in recent decades. The variability of renewable energy causes technical challenges for its integration in the energy system. Therefore, to increase the share of renewable energy, more flexibility is imperative in the power system. Among all the flexibility options, customer-sited energy storage systems could be a promising measure for addressing both grid and consumer needs. To analyse the effect of customer-sited energy storage systems on renewable energy integration, an integrated power generation and customer-sited energy storage systems expansion planning model is proposed here. The model features high time resolution, operational details of power generation units and energy storage system, as well as load dispatch optimisation. The expansion and operation of the energy storage systems are based on the objective of reducing the total power system costs. Sichuan Province in China is taken as a case study because of its abundant renewable energy resources and increasing renewable energy share in the power system. The following conclusions are drawn: 1) customer-sited energy storage could partially replace coal power plants to provide flexibility for integrating a high share of renewable energy into the power system; 2) CO2 emissions can be significantly reduced at a cost of $30 per tonne; 3) customer-sited energy storage systems cannot gain profits based on the current storage cost and electricity market policy. To enhance the development of customer-sited energy storage systems, storage costs need to be reduced further with technology improvement and policy support. Meanwhile, the electricity market mechanism should be improved to add more incentives for customer-sited energy storage systems, such as increasing peak and valley electricity price differences, providing subsidies for energy storage projects, and increasing the capacity price relative to the energy price in the two-part electricity tariff.