Analysis of Distributed Energy Storage as a Core Grid Infrastructure via Production Cost Modeling

Abstract

Energy storage plays a pivotal role in enabling power system operation with more flexibility and resilience. Unlike current practice that considers energy storages as attached ancillary devices, this paper focuses on storages as a core infrastructure by looking at their spatial distribution in the system. A sensitivity analysis based on production cost modeling is conducted to demonstrate the benefits of distributed energy storages. First, the modeling of energy storages in production cost modeling is presented. Second, potential optimal locations of distributed energy storages in a power system are discussed. Finally, multiple scenarios with various numbers and locations of additional distributed energy storages in the WECC 2030 model are created. The production cost modeling results of these scenarios show that distributed energy storages have higher utilization compared to the centralized ES units and therefore provide significantly more benefits in terms of reduction in generation cost, emission cost, and volatility of location marginal prices. A saturation effect is observed suggesting the selection of optimal locations will further improve the benefits.