Energy storage systems : state of the art and economic evaluation criteria

In the last decade the spread of the Renewable Energy Sources (RES), in particular of the Variable renewable electricity sources (VRES), has deeply changed the landscape and consequently the way it is managed the electric grid. Before the development of the RES, the managing authority of the electric grid had to deal with the variability coming only from the demand side of the electric grid. Nowadays, beside the demand variability, it has to face the instability of an increasing share of the supply side of the grid. The reason behind this is that VRES are intermittent and unpredictable. Sun power and wind power cannot be neither controlled nor predicted with the accuracy of seconds, because its regularity of supply is interrupted by stochastic elements as weather conditions; nevertheless consumers need electric energy to be reliable and of good quality. In this scenario, the Energy Storage System (ESS) can provide a valuable solution to this problem, absorbing the variability at any stage of the electric power supply chain. Energy storage systems allow fluctuating renewable energy sources to be as stable as conventional systems(Nair & Garimella, 2010) and also provide a mean to decouple generation of electricity from its use (Houseman, 2005), minimising supply and demand related issues(Nair & Garimella, 2010). There is still one strong barrier that limits the spreading of ESS: its economical feasibility. The problem of assessing the economic profitability of ESS has not simple solution though. This complexity is due to the multitude of variables involved in this issue. These usually refer to: i. Different political, environmental and social backgrounds (which determine the national energy strategy, the as-is national energy production mix, the energy consumption profile etc.); ii. Different kind of actors who could get involved in this investment (e.g. the owner of a renewable energy power plant; the company that manages the electric grid; a private householder etc.) whose return has to be identified and analysed case by case; iii. The wide range of technologies that can be used as a ESS (e.g. Batteries, Compressed Air Energy Storage, Pumped Hydro Storage, Fuel Cells etc.); iv. The diverse yardsticks used to determine the economical feasibility, since there is not a method that fits every scenario. Through a review of the academic literature on the topic, the purpose of this work is: (i) to make order in the techno-economic landscape of ESS, giving the reader the necessary tools to comprehend the matter; (ii) to discover the different economic evaluation methods implemented in the academic literature; (iii) to suggest an economic evaluation framework that shall be used in order to develop a complete economic analysis according to the context of application of ESS. This dissertation is based on a review of the literature on this topic: 103 different thesis were analysed in order to understand which evaluation methods have been used. Particular attention was given to the specific yardstick employed to define the economic return. Every work has been classified according to the economic yardstick exploited. After a definition of the different areas of application of ESS, it was assessed paper by paper whether there was a connection between the areas of application and the economic yardstick. It was found that there were no clear correlation between these two variables. Every area of application should be assessed in a specific way: what was found is a disparity among the different evaluation methods within the same area of application. This difference concerned economic yardsticks, voices of income and the target of the economic analysis: for these diversities is difficult to compare the different economic evaluations without having a common structure of evaluation.