IEEE Power & Energy Magazine - September/October 2017 - 34

✔✔ demonstrate the impact of future market arrange-

ments on the business case for ES
✔✔ present a concept for quantifying the contribution of

ES to security of supply
✔✔ demonstrate ES's option value under uncertainty.

Whole-System Benefits of Storage
in the Future U.K. Electricity System
Economic Benefits of Storage Deployment

figure 1. The battery storage facility in the U.K.'s Leighton
Buzzard substation. (Used with permission from UK Power
Networks.)

Annual GB System Cost Savings (£bn/yr)

4
2.94

1.96
OPEX
D CAPEX
T CAPEX
S CAPEX
G CAPEX
Total

-1

-2
High

Low

Storage Cost

figure 2. The annual GB system cost savings resulting
from -deployment of distributed ES.

However, traditional regulatory regime and electricity
market arrangements could represent a barrier to providing
some services, possibly undermining the business case for
ES. In this context, the specific objectives of this article are to
✔ ✔ demonstrate the economic benefits of deploying
ES over multiple sectors in the future U.K. electric
power system
✔✔ identify the value of ES in reducing carbon emissions
at lower cost
✔ ✔ assess the potential competition between ES and
other flexible options (DSR, flexible generation, and
interconnectors)
34

ieee power & energy magazine

In this section, we discuss the whole-system value of ES for
the Great Britain (GB) electricity system in 2030. The WeSIM
model, developed at Imperial College London, was applied
to add cost-optimal ES capacity to the GB electricity generation mix in the National Grid's "Gone Green" scenario,
which features a high penetration of variable renewables. The
model could adjust only conventional generation capacity-
combined-cycle gas turbines (CCGTs) and open-cycle gas turbines (OCGTs)-while investing in ES; the low-carbon generation portfolio was kept the same as in the original scenario.
Assumptions regarding the cost of distributed ES technologies in 2030 were taken from the report by the Carbon Trust
and Imperial College (see the "For Further Reading" section),
with a high ES cost scenario of £1,160/kW and a low ES cost
scenario of £360/kW. To annualize the ES investment cost, a
20-year lifetime and 7% cost of capital are assumed.
System optimization results show that the model finds it
cost optimal to add 8-19 GW of additional ES, depending
on its cost. The option to build ES, therefore, represents the
opportunity to reduce overall system cost. Figure 2 presents
the total annual system cost savings per component, comparing the case without new ES and cases where new ES is
available at either a high or a low cost.
The total net cost savings resulting from ES deployment
vary between about £2 billion and £3 billion per year; higher
savings are associated with lower cost of ES and vice versa.
The net system cost savings consist of several key components.
✔✔ System operating expense (OPEX) savings. The deployment of ES results in the higher use of low-carbon
generation, characterized by lower operating costs
(reduced curtailment) and reduced production over a
conventional gas-fired plant. This also includes provision of balancing and frequency regulation (FR)
services, now growing in importance in GB given the
reduction of system inertia.
✔✔ Distribution capital expense (D CAPEX). Distributed
ES could support the management of power flows in
distribution networks, leading to lower requirements
for distribution network investment that may reinforce
the grid to cope with increasing demand and/or increasing deployment of distributed generation, e.g.,
photovotaic (PV) generation.
✔✔ Generation capital expense (G CAPEX). ES displaces
peaking capacity (e.g., OCGT) as the conventional
provider of adequate generation capacity required to
september/october 2017

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - September/October 2017