Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism
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 p...
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| Format: | Article |
| Language: | English |
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MDPI AG
2020-07-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/13/15/3816 |
| _version_ | 1797561409630896128 |
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| author | Farhad Anvari-Azar Dani Strickland Neil Filkin Harry Townshend |
| author_facet | Farhad Anvari-Azar Dani Strickland Neil Filkin Harry Townshend |
| author_sort | Farhad Anvari-Azar |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-03-10T18:14:32Z |
| format | Article |
| id | doaj.art-f1f0929deaa34f039377f535d8a10b34 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T18:14:32Z |
| publishDate | 2020-07-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-f1f0929deaa34f039377f535d8a10b342023-11-20T07:54:01ZengMDPI AGEnergies1996-10732020-07-011315381610.3390/en13153816Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing MechanismFarhad Anvari-Azar0Dani Strickland1Neil Filkin2Harry Townshend3Viridis Power, 17 The Courtyard, Gorsey Lane, Coleshill B46 1JA, UKWolfson School, Loughborough University, Loughborough, Leicestershire LE11 3TU, UKViridis Power, 17 The Courtyard, Gorsey Lane, Coleshill B46 1JA, UKViridis Power, 17 The Courtyard, Gorsey Lane, Coleshill B46 1JA, UKThere 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.https://www.mdpi.com/1996-1073/13/15/3816gas enginesenergy storagebalancing mechanismenergy managementNPV |
| spellingShingle | Farhad Anvari-Azar Dani Strickland Neil Filkin Harry Townshend Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism Energies gas engines energy storage balancing mechanism energy management NPV |
| title | Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism |
| title_full | Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism |
| title_fullStr | Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism |
| title_full_unstemmed | Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism |
| title_short | Net Present Value Analysis of a Hybrid Gas Engine-Energy Storage System in the Balancing Mechanism |
| title_sort | net present value analysis of a hybrid gas engine energy storage system in the balancing mechanism |
| topic | gas engines energy storage balancing mechanism energy management NPV |
| url | https://www.mdpi.com/1996-1073/13/15/3816 |
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