Price development and bidding strategies for battery energy storage systems on the primary control reserve market. (October 2017)

• Record Type: Journal Article
• Authors: Fleer, Johannes; Zurmühlen, Sebastian; Meyer, Jonas; Badeda, Julia; Stenzel, Peter; Hake, Jürgen-Friedrich; Uwe Sauer, Dirk
• Is Part Of: Energy procedia. Volume 135(2017)
• Page Start: 143
• Page End: 157
• Publication Date: 2017-10
• Subjects: Battery energy storage system -- primary control reserve -- economic assessment; Power resources -- Congresses; Power resources -- Periodicals; Power resources; Conference proceedings; Periodicals; 333.7905
• DOI: 10.1016/j.egypro.2017.09.497
• Languages: English
• ISSNs: 1876-6102

Abstract

Abstract: Decreasing prices on the German primary control reserve (PCR) market lead to an uncertain economic situation for battery energy storage systems (BESS) providing PCR. In a simulation-based approach, which takes into consideration application-specific aging, an economic assessment of a 1.5 MWh BESS providing PCR is conducted. Different bidding strategies for PCR auctions have been developed and their impact on revenues and battery aging has been investigated. Furthermore, following an option value approach, we analyzed how different PCR price paths and the time of investment affect the economic feasibility of BESS providing PCR. The results show that the choice of strategies developed in this paper do not have a substantial influence on revenues and battery aging. However, the development of PCR market prices and battery system costs is crucial for the economic feasibility of BESS providing PCR. Investments come with a high risk due to the volatility of PCR market prices and the uncertainty of future battery system prices.