IEEE Power & Energy Magazine - September/October 2017 - 36

illustrates the interaction and competition among these flexible options in delivering a cost-efficient, low-carbon power
system. Although no two options will be direct substitutes,
there will be a degree of competition among them.
As in the storage-only studies presented in the "Economic
Benefits of Storage Deployment" section, the system optimization model adds ES only if it results in a net system benefit.
Figure 6 illustrates how the net benefits of ES deployment
Competition Among ES
change as a consequence of having other flexible options
and Other Flexible Solutions
In addition to ES, there are other competing flexible tech- present in the system and also indicates the cost-optimal volnological solutions that can have a positive effect on the umes of ES for the same scenarios along the top axis.
The availability of flexible generation reduces the opporability of a system to achieve cost-effective integration of
low-carbon generation. Some of the most studied solutions tunities for new ES to generate operating cost savings due to
include DSR and flexible generation. In this section, we con- more efficient operation and lower curtailment of renewables.
sider the potential competition among ES and other flexible Conversely, the system cost savings for generation and distribuoptions and quantify their impact on optimal deployment tion CAPEX are not affected. Compared to the storage-only
levels of ES as well as the resulting system benefits. Figure 5 scenario, the total annual net benefits of ES drop to the range
of £0.4-1.4 billion/year-although it is interesting to note that
the volume of ES being deployed does not change significantly.
This occurs because it is cost-effective to add storage as long as
its marginal benefit is above its cost, and this break-even point
Energy Storage
is observed at similar volumes in cases with and without flexible generation. On the other hand, in the case without flexible
Increasing Asset Use and
generation, the marginal system benefits for first gigawatts of
System Balancing Efficiency
storage capacity are higher; hence, the total cumulative benefit
up to the break-even point is also greater.
Demand-Side
Flexible
Under full penetration of DSR, the net benefits ES can proResponse
Generation
vide are even further reduced. With low ES cost, the net benefits materialize at £0.38 billion/year (significantly lower than
with storage only); in the case of high storage cost, the system
figure 5. Flexibility options in future electricity systems.
net benefits are virtually zero. The
cost-optimal amount of ES to add
Storage Capacity (GW)
in a high-cost scenario with DSR
7.9 19.3
7.7 19.3
0.8 11.9
0.0 11.5
is lower than 1 GW; in a low-cost
4
scenario, the optimal volume is 7 GW
OPEX
lower than in the storage-only
D CAPEX
3
case, as DSR takes advantage of
G CAPEX
2.94
the same cost-saving opportunities
S CAPEX
as ES. Unlike flexible generators,
T CAPEX
2
1.96
DSR could also affect the distribuTotal
tion network loading, thus reduc1.41
1
ing the associated reinforcement
cost. At the same time, DSR can
0.44
0.38
0
0.25
support system balancing, provide
0.04
0.03
reserve and response services, and
reduce backup generation capac-1
ity requirements.
In the situation where ES com-2
petes
against both flexible generaHigh Low
High Low
High Low
High Low
tion and DSR simultaneously, the
Storage
Storage
Storage
Storage
results are similar to the case where
Only
Versus
Versus
Versus
only DSR competes against ES,
Flexible
DSR
All
Generation
confirming that DSR represents
the key competitor to distributed
figure 6. Changes in deployed ES capacity when it is exposed to competition from
ES. Additionally, the integration
other flexible options.
Annual GB System Cost Savings (£bn/yr)

Clearly, there is a massive scope for the application of ES
and other flexible options in the context of future decarbonization of the U.K. power system. The flexibility provided by
ES has the potential to enable the system to achieve ambitious future decarbonization targets at a far lower cost than
with a low-flexibility system.

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september/october 2017

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