LAPSE:2023.24431
Published Article
LAPSE:2023.24431
Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism
Farhad Anvari-Azar, Dani Strickland, Neil Filkin, Harry Townshend
March 28, 2023
There is the potential for hybridised gas engine-energy storage systems to participate in the Balancing Mechanism (BM) by offering a product that marries the advantages of both units. The higher price offerings are currently dominated by pumped storage (PS) assets. Given their high-flexibility, PS plants mostly offer at higher prices, but respond quicker and can run for a smaller minimum run time than a gas engine on its own. The operation of the hybrid system must match the operation of the pumped storage plants, to be able to claim a space in this part of the BM market including meeting a minimum run time and minimum start time. The business case is dependent on battery costs which in turn depend on size and operational strategy. This paper uses a case study approach to estimate Net Present Value of a hybrid system. The paper uses a mixture of publicly available data and industrially provided data within its analysis. The paper concludes that battery cost and lifespan are still issues and that battery-engine hybrids are not economic at present. There is indication in the modelling that under very favorable conditions such as low compound interest rates, an acceptance of offers above 7 times/day and low gas price, it is possible to see a return on investment of a lithium ion-based battery-gas engine hybrid.
Keywords
balancing mechanism, energy management, Energy Storage, gas engines, NPV
Suggested Citation
Anvari-Azar F, Strickland D, Filkin N, Townshend H. Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism. (2023). LAPSE:2023.24431
Author Affiliations
Anvari-Azar F: Viridis Power, 17 The Courtyard, Gorsey Lane, Coleshill B46 1JA, UK
Strickland D: Wolfson School, Loughborough University, Loughborough, Leicestershire LE11 3TU, UK [ORCID]
Filkin N: Viridis Power, 17 The Courtyard, Gorsey Lane, Coleshill B46 1JA, UK
Townshend H: Viridis Power, 17 The Courtyard, Gorsey Lane, Coleshill B46 1JA, UK
Journal Name
Energies
Volume
13
Issue
15
Article Number
E3816
Year
2020
Publication Date
2020-07-24
Published Version
ISSN
1996-1073
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Original Submission
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PII: en13153816, Publication Type: Journal Article
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LAPSE:2023.24431
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doi:10.3390/en13153816
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Mar 28, 2023
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