Basics of Battery Economics
• Battery storage economics are driven by the dispatch strategy
• Batteries can derive value from multiple revenue streams
• The value derived from discharging the battery must be greater than the cost incurred to charge the battery, regardless of the application
Energy Storage Value Streams
• Demand management
Reduce demand charges on utility bill
• Energy arbitrage
Buy energy during low price periods,
consume stored energy during high price periods
• Ancillary services
Get paid to provide grid support to the ISO
• Demand response
Get paid by utility to reduce demand
• Resiliency
Serve critical loads during grid outages
• TD deferral
Get paid to help utility delay upgrades
• Capacity markets
Get paid by ISO to provide capacity
• Others may be possible as well Application Stacking Challenge
• Batteries can only do one thing at a time But each use may only need a few hours per year
• To maximize ROI, must determine:
What application battery should serve
When it should serve it
• Requires an optimization model
