Potential Arbitrage Revenue of Energy Storage Systems in PJM [electronic resource].
- Washington, D.C. : United States. Dept. of Energy, 2017.
Oak Ridge, Tenn. : Distributed by the Office of Scientific and Technical Information, U.S. Dept. of Energy
- Physical Description:
- Article numbers 1,100 : digital, PDF file
- Additional Creators:
- Harvard University, United States. Department of Energy, and United States. Department of Energy. Office of Scientific and Technical Information
- Restrictions on Access:
- Free-to-read Unrestricted online access
- The volatility of electricity prices is attracting interest in the opportunity of providing net revenue by energy arbitrage. We analyzed the potential revenue of a generic Energy Storage System (ESS) in 7395 different locations within the electricity markets of Pennsylvania-New Jersey-Maryland interconnection (PJM), the largest U.S. regional transmission organization, using hourly locational marginal prices over the seven-year period 2008–2014. Assuming a price-taking ESS with perfect foresight in the real-time market, we optimized the charge-discharge profile to determine the maximum potential revenue for a 1 MW system as a function of energy/power ratio, or rated discharge duration, from 1 to 14 h, including a limited analysis of sensitivity to round-trip efficiency. We determined minimum potential revenue with a similar analysis of the day-ahead market. We presented the distribution over the set of nodes and years of price, price volatility, and maximum potential arbitrage revenue. From these results, we determined the break even overnight installed cost of an ESS below which arbitrage would be profitable, its dependence on rated discharge duration, its distribution over grid nodes, and its variation over the years. We showed that dispatch into real-time markets based on day-ahead market settlement prices is a simple, feasible method that raises the lower bound on the achievable arbitrage revenue.
- Report Numbers:
- E 1.99:1424748
- Published through SciTech Connect.
Energies (Basel) 10 12 ISSN 1996-1073; ENERGA AM
Mauricio Salles; Junling Huang; Michael Aziz; William Hogan.
- Funding Information:
View MARC record | catkey: 23763457