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Net present value analysis of a hybrid gas engine-energy storage system in the balancing mechanism

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journal contribution
posted on 20.11.2020, 09:26 authored by Farhad Anvari-Azar, Dani StricklandDani Strickland, Neil Filkin, Harry Townshend
There is the potential for hybridised gas engine-energy storage systems to participate in the Balancing Mechanism (BM) by offering a product that marries the advantages of both units. The higher price offerings are currently dominated by pumped storage (PS) assets. Given their high-flexibility, PS plants mostly offer at higher prices, but respond quicker and can run for a smaller minimum run time than a gas engine on its own. The operation of the hybrid system must match the operation of the pumped storage plants, to be able to claim a space in this part of the BM market including meeting a minimum run time and minimum start time. The business case is dependent on battery costs which in turn depend on size and operational strategy. This paper uses a case study approach to estimate Net Present Value of a hybrid system. The paper uses a mixture of publicly available data and industrially provided data within its analysis. The paper concludes that battery cost and lifespan are still issues and that battery-engine hybrids are not economic at present. There is indication in the modelling that under very favorable conditions such as low compound interest rates, an acceptance of offers above 7 times/day and low gas price, it is possible to see a return on investment of a lithium ion-based battery-gas engine hybrid.

Funding

Innovate UK, grant number KTP: 000010968

History

School

  • Mechanical, Electrical and Manufacturing Engineering

Published in

Energies

Volume

13

Issue

15

Publisher

MDPI AG

Version

VoR (Version of Record)

Rights holder

© The authors

Publisher statement

This is an Open Access Article. It is published by MDPI under the Creative Commons Attribution 4.0 Unported Licence (CC BY). Full details of this licence are available at: http://creativecommons.org/licenses/by/4.0/

Acceptance date

21/07/2020

Publication date

2020-07-24

Copyright date

2020

eISSN

1996-1073

Language

en

Depositor

Prof Dani Strickland . Deposit date: 16 November 2020

Article number

3816