Improving market design for energy storage
This press release was originally issued by Columbia Engineering.
Energy storage plays a crucial role in our transition to cleaner and more sustainable energy sources. It allows us to store excess energy when it is available, from renewable sources such as wind and solar, and use it when demand is high or supply is limited. This helps stabilize the grid, reduces reliance on fossil fuels and lessens the impact of intermittent power sources.
Balancing consumer demands with power system capabilities
In many parts of the United States, such as New York, California, and Texas, private companies are responsible for owning and operating energy storage systems. These companies participate in electricity markets, where they buy and sell electricity to maximize their profits. However, it is important for consumers to ensure that profit-driven corporate motives also align with the larger goal of improving sustainability and improving lives around the world. This means striking a balance between reducing carbon emissions and keeping electricity costs affordable to consumers. It is crucial to align the needs of electricity users with the capabilities of the electricity system while promoting a greener future.
Electricity markets are closely linked to physical electricity systems, which distinguishes them from other markets. In order to ensure the smooth functioning and efficiency of the market, specialized models are used to compensate the participating resources. These models take into account the physical characteristics of resources, such as their production capacity and availability. The goal of electricity market design is to create and update these models in a way that maximizes the overall benefit to society.
New Model for Market Participation Interactions
A new study directed by Columbia EngineeringPosted in Joule, examines how different ways of participating in these markets affect the overall benefits of energy storage to society. The researchers used an agent-based computing framework – a model that simulates individual behaviors within complex systems – to simulate scenarios with renewable and storage capacity and market options.
“Our main innovation was to model market participation interactions between storage and the market,” said the study’s lead author. Bolun Xuassistant professor of earth and environmental engineering. “We discovered that not only do we need more renewables and better storage technologies, but that designing the market to best integrate energy storage to reduce costs and emissions for future electrical systems is also of crucial importance. For this, we need new calculation methods and, in the future, AI-assisted analyses. »
“Our study highlights how market designs can have a significant impact on the role of energy storage in both the electricity economy and the decarbonization journey, ranging from stages of early decarbonization to deep phases.” — Bolun Xu, Assistant Professor of Earth and Environmental Engineering
The right balance between saving and reducing emissions
The study compared different energy storage methods to participate in the market and found trade-offs between making energy more affordable for consumers and reducing carbon emissions. Researchers have found that participating in daily markets, where electricity is traded a day before it is needed, is more effective in reducing carbon emissions. On the other hand, participation in real-time markets, where electricity is traded in real time, is more effective in reducing costs.
“Our study highlights how market designs can have a significant impact on the role of energy storage in both the electricity economy and the decarbonization journey, ranging from stages of early to deep-stage decarbonization,” Xu said. “Our proposed open source framework provides a valuable tool for researchers and policy makers to assess emerging technologies and policy incentives.”
Xu’s team is currently working with national labs and California ISO, a nonprofit organization that manages California’s power grid and electricity market. They work with projects funded by the US Department of Energy and the National Science Foundations to explore new market designs and integrate AI to analyze and facilitate energy storage operations.
“It is clear,” added Xu, “that deployments of renewable resources and storage must be accompanied by appropriate electricity market designs and policy incentives to balance economics and emission reductions. California has the highest storage capacity in the world and we are excited to deploy our solutions there. »