Stacked-Value of Battery Storage: Effect of Battery Storage Penetration on Power Dispatch

In this work, the stacked values of battery energy storage systems (BESSs) of various power and energy capacities are evaluated as they provide multiple services such as peak shaving, frequency regulation, and reserve support in an ‘Arizona-based test system’ - a simplified, representative model of Salt River Project’s (SRP) system developed using the resource stack information shared by SRP. This has been achieved by developing a mixed-integer linear programming (MILP) based optimization model that captures the operation of BESS in the Arizona-based test system. The model formulation does not include any BESS cost as the objective is to estimate the net savings in total system operation cost after a BESS is deployed in the system. The optimization model has been formulated in such a way that the savings due to the provision of a single service, either peak shaving or frequency regulation or spinning reserve support, by the BESS, can be determined independently. The model also allows calculation of combined savings due to all the services rendered by the BESS.

The results of this research suggest that the savings obtained with a BESS providing multiple services are significantly higher than the same capacity BESS delivering a single service in isolation. It is also observed that the marginal contribution of BESS reduces with increasing BESS energy capacity, a result consistent with the law of diminishing returns. Further, small changes in the simulation environment, such as factoring in generator forced outage rates or projection of future solar penetration, can lead to changes as high as 10% in the calculated stacked value.