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Analysis 11.1.2016

Value of the storage content depending on (stochastic) electricity price and storage level at a specific point in time and the derived optimal strategy (charging, discharging and holding the storage level) following the stochastic control theory.
© EWL/LEF

Economic check for energy storages

How cost-effective are energy storages? Scientists at the University of Duisburg-Essen investigated how economic energy storages are and combine methods from financial mathematics with energy-economic and stochastic models. The procedure should be more reliable than the conventional deterministic models.

Project status Project completed
Projekt duration November 2012 until December 2015

With increasing infeed of electricity from fluctuating renewable energy sources, the balance between supply and demand in the current market is increasingly difficult. An important role is attributed to storages, which can receive electricity in times of great supply and can provide electricity in times of high demand. Beside the development of most powerfull and cost-effective storage, the question of economic profitability of storage in future energy systems raises, not least compared to alternative backup systems such as gas turbines. To ensure the practical relevance, the research methods and results will be regularly discussed with a practice advisory board in terms of their practical usability and in terms of further improvements. 

In the project StoBeS, new methods for the analysis of the contribution of storages to a sustainable energy supply, in particulary elercticity supply, will be developed. In the context of the developed scenarios (2030 - 2050), the stochastic characteristics of the wind and photovoltaic infeed are to be modeled. Based on this stochastic characterization the potential flexibility that storages can provide will be validated. The developed valuation methods will be used to valuate selected storage configurations, such as distributed battery storages in conjunction with photovoltaic systems, large-scale compressed air storages for temporary storage of wind power in Northern Germany or methods of power-to-gas. Furthermore, the approaches shoud be used to derive "target costs" for storage technologies and to analyze the impact of different regulatory requirements, such as investigation of capacity markets or the treatment of own consumption on the economics of distributed and centralized storages.

  • Die Grafik zeigt die Übersicht relevanter Inputdaten für die stochastische Bewertung von Speichern. © EWL/LEF
  • Zu sehen sind die Vergleichmäßigungseffekte bei Aggregation mehrerer Einzelanlagen (Photovoltaik). © EWL/LEF
  • Die Skalierung zeigt die Photovoltaik-Einspeisung mit Hilfe eines Clear-Sky-Modells. © EWL/LEF
  • Analysis of hourly wind infeed fluctuations (frequency filter by fourier transformation) © EWL/LEF
  • Wert des Speicherinhaltes ist abhängig vom (stochastischen) Strompreis und dem Speicherfüllstand zu einem bestimmten Zeitpunkt und die daraus abgeleitete optimale Strategie (Laden, Entladen oder Füllstand halten) in Anlehnung an die stochastische Kontrolltheorie. © EWL/LEF

Evaluate energy storage in six dimensions

The modelling of the stochastics of the infeed from renewables with respect to dependence in time and space has been improved by the following techniques. We separate the wind infeed by the Fourier Transformation into weekly, half-day and hourly frequencies. For the solar infeed we use Clear-Sky models, where we consider the relation to the maximal possible irradiation. We also implemented two algorithms for the numerical valuation of energy storages, which show already a complexity of 5 dimensions (price, inventory, strategy, time and value function).

At the moment we combine the results for wind and solar infeed with special regard to homogenous effects and we extend our algorithms by an additional dimension for depicting the cycle stability as a typical quality of battery storages.

Financial Mathematics and Stochastic

In this project, methods of financial mathematics and stochastics are linked to energy economic approaches in order to provide innovative approaches to validate energy savings. The assessed potential of storage flexibilities are from financial mathematics point of view optionalities that can be evaluated with appropriate methods of option valuation. In the energy-economic context it has to be taken into account, that this valuation is to be determined not only in response to a given price process. Additionally, energy-economic constraints such as available network or generation capacity may affect the value significantly. This resulting valuation problems with special stuctures of optionalities cannot be found in literatue in this form and require new analysis methods.

The planned project is a systematic study on the transformation of the energy system with the focus on the contribution of storages in future energy systems. Moreover, the stochastic nature of the fluctuating infeed of wind and solar energy will be, in constrast to conventional system system studies, decidedly considered. Furthermore stochastic optimazation methods to determine the optimal management of storages will be developed. Thus, the potential contribution of storages can show significantly better on the basis of deterministic models, even for detailed analysis of annual courses. The study contributes clearly to a better understanding of the systematic connection between renewable energy expansion, grid restrictions and storage usage.

Evaluate cost-effectiveness of energy storage technologies in market

For energy-economic research, new ways of storage valuation can be developed. These provide an important input for systematic analysis of the energy system transformation generates international and innovative contribution to interdisciplinary engineering and economic energy research. The developed methods are of significant importance for the application, since they can be used to validate the cost of storage technologies in the market realistically. This makes an important contribution to make deliberated investment decisions under the Energiewende. By a detailed analysis of the interactions of stochastic infeed, energy storage and grid restrictions, an important input for grid development is provided, which allows to make a tradeoff between grid expansion and other methods of grid and system management.

Supported by: The Federal Government on the basis of a decision by the German Bundestag

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Research funding

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