The effect of Energy Storage System in Electricity Market

The effect of Energy Storage System in Electricity Market

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Description: What is Energy Storage System? Energy storage system (ESS) is accomplished by devices that store electricity to perform useful processes at a peak time. These devices help to maintain electricity network stability and raise efficiency of energy supply. In addition, ESS lessons the fundamental problems in the electricity system caused by the inefficiency of energy consumption, production and transmission.

ESS is categorized by battery technology (Lithium-ion Batteries, Redox Flow Batteries, Sodium-Sulfuide Batteries, capacitor and Fly wheel).

 
Author: Mo Jung-youn (Senior) | Visits: 598 | Page Views: 693
Domain:  Green Tech Category: Battery & Fuel Cell 
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Contents:
Energy Storage system
What is Energy Storage System?
- Energy storage system (ESS) is accomplished by devices that store
electricity to perform useful processes at a peak time.
- These devices help to maintain electricity network stability and raise
efficiency of energy supply.

- In addition, ESS lessons the fundamental problems in the electricity system
caused by the inefficiency of energy consumption, production and
transmission.

- ESS is categorized by battery technology (Lithium-ion Batteries, Redox
Flow Batteries, Sodium-Sulfuide Batteries, capacitor and Fly wheel).
2

How to use?
Generation

Power
networkconnect

T
r
a
d
i
t
i
o
n
a
l

Secure reserve capacity
(Electric supply reserve capacity –
non spinning and spinning)

Power output support

Load following
(Tertiary balancing)

Secure Electric supply capacity

Transmission

Consumer

Voltage Support

Electric energy time
shifting

Transmission
congestion relief

Electricity bill
management

Transmission Support

Increase electricity
reliability in commercial
part

Transportable
Transmission/Distribution
Upgrade Deferral

Increase electricity
reliability at home

Energy cost management
on-site power

Power
networkDispatch

R
e
n
e
w
a
b
l
e

New-renewable energy volatility relief
Distribution upgrade due
to wind
Renewables capacity Firming

Secure Micro-grid
Capability

Transmission upgrades
due to solar

3

What is the advantage of ESS?
ESS is a key component for Low Carbon Generation
- With rapidly increasing Solar and Wind generation, ESS can help enhancing
reliability of the power system by mitigating variability of RE.
- ESS can improve the efficiency of RE by minimizing curtailment.

ESS can enhance the efficiency of power system
- Reduces Energy Cost by shifting demand from expensive peak periods to
less expensive off-peak periods.

- Reduces Reserve Cost by providing ramping services to mitigate the
variability of RE.
- Reduces Capacity Cost by reducing the amount of installed peaking
capacity needed for System Adequacy and the associated capital costs.

ESS reduce the cost of upgrading transmission network
- Store energy at off-peak time and reduce the stress of line at peak hours.
- Enables more efficient local peak management.

4

The status of ESS Industry in Korea
The value chain of ESS industry
Downstream
Material

ESS industry

Upstream
Assembling

Component

Service

• ESS packaging
• (Cell) Cathode, Anode,
Electrolyte, Separator

• Battery Cell/ Module

• (Package Material) Smart
steel plate

• EMS

Installation

• PCS
• ESS system Integration

• Energy demand
response management
• Electricity Voltage
support

Management

The status of ESS Industry in Korea
- According to B3(2014), the market share of Korea’s Lithium-ion Batteries
at third quarter in 2014 is 43.6%(Samsung SDI 23.6%, LG chemical 20.0%).
- In case of Lithium-ion Batteries and Capacitor, the mass production is
implemented in Korea. Other technologies are in the technology
development stage.
5

The Benefit-Cost analysis result in Korea’s ESS industry
The cost of ESS business is higher than the benefit.
- Under the high wind power penetration scenario, the ESS benefit
is the highest in winter (In Korea, the peak load occurs in winter).

- Even thought in this case, the ESS benefit is only 76% of the cost.

The result of BC analysis in Koreas' ESS industry
Summer

PV

Total daily benefit
(10,000won/MW)

26.3

36.4

Total benefit/Total cost

Wind

Winter

0.54

0.76

Total daily benefit
(10,000won/MW)

24.8

33.4

Total benefit/Total cost

0.52

0.70
6

Suggestions for ESS industry development
Policies for ESS industry development
The introduction of ESS installation obligation regime

ESS lease project connecting with new renewable energy

New demand creation
ODA energy supply support project with ESS installation

International ESS research institutions establishment

Incentives for installation

ESS installation subsidy and tax credit policy
Redesign the domestic Adjust Frequency Service(AS).

Electricity price regime
Redesign the electricity price system
7

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