Talking about the application scenarios and economic benefit analysis of grid-side energy storage power stations

An Kerui Wu Chen Yan

0Introduction

In recent years, China's northwest region has been rich in wind and solar resources, with large installed capacity of new energy power generation; while the central and eastern regions have developed economies and high electricity loads. In order to adapt to the current situation of the misaligned distribution of "source" and "load" and the access of a large number of new energy sources such as wind and solar to the power grid, it is necessary to vigorously develop various energy storage technologies to break through the limitation of "generating and consuming" electricity in traditional power systems, so as to make up for the gap in the flexible regulation of the power grid and improve the absorption capacity of new energy electricity such as wind and solar.

With the improvement of the level of power system integration and operation control technology, the scale of electrochemical energy storage power stations can reach hundreds of megawatts or even gigawatts, and the conditions for large-scale commercial application are becoming more mature. However, as a new business model, the business model and price mechanism of new energy storage power stations are not yet completely clear. Reference [1] sorted out and compared the price mechanism and compensation mechanism of new energy storage power stations at home and abroad, analyzed the economic feasibility of new energy storage power stations under different models, and put forward relevant suggestions for the price mechanism of new energy storage power stations in China. Reference [2] pointed out that China's new energy storage industry is still in the early stage of commercialization and large-scale development. The relevant market mechanism and electricity price policy are not perfect enough. There are problems such as poor cost guidance and low social willingness to invest actively. It is urgent to accelerate the promotion of power system reform and the construction of a unified national power market system, and improve the investment return and cost guidance mechanism of new energy storage power stations. Reference [3] summarizes the practice and experience of the pricing mechanism of typical independent new energy storage power stations abroad, describes the relevant exploration of the pricing mechanism of energy storage power stations in China, and believes that both the government two-part electricity price model and the independent participation in the electricity market model are difficult to support the large-scale commercial application of energy storage power stations. It also proposes a price formation mechanism for energy storage power stations based on transfer factors and a cost guidance optimization method. The above-mentioned literature has conducted theoretical exploration and research on the pricing mechanism of energy storage power stations, but has not proposed a pricing mechanism for specific investment practices and analyzed the feasibility of project investment.

Based on a large-capacity centralized energy storage demonstration project (the project is a grid-side energy storage power station) in Guyuan City, Ningxia Hui Autonomous Region (hereinafter referred to as "Ningxia"), this paper analyzes the current status and needs of the power grid, studies the establishment of application scenarios for grid-side energy storage power stations, constructs a business model and attempts to form a capacity electricity price mechanism, and analyzes whether the investment in the project is economically feasible.

1. Research on application scenarios of grid-side energy storage power stations

1.1 Current status and demand of power grid

The backbone network of Ningxia power grid is 750/330/220kV, among which 750kV ultra-high voltage is a double-circuit ring network structure; 330kV ultra-high voltage forms a ring network and a double-circuit chain-type main-auxiliary combined structure, which is mainly located in Wuzhong City, Zhongwei City, Guyuan City and other areas in southern Ningxia; 220kV high voltage forms a grid structure, which is mainly located in Yinchuan City, Shizuishan City and other areas in northern Ningxia. As of the end of 2021, in the Ningxia power grid, the total installed capacity of thermal power is 29710MW, the total installed capacity of hydropower is 422MW, the total installed capacity of wind power is 14548MW, and the total installed capacity of photovoltaic power generation is about 13836MW, with wind and light new energy installed capacity accounting for 48.5%. The scale of wind and light new energy installed capacity within the power grid continues to grow rapidly. At the same time, the load growth is slow, the adjustable load capacity is limited and it is still difficult to fully mobilize, the power system has insufficient peak-shaving resources, and the regulating power source is mainly thermal power and small-capacity hydropower as a supplement. The problem of new energy power consumption capacity approaching saturation and being unable to be consumed nearby is becoming increasingly serious. Energy storage power stations can charge during the peak power generation period of wind and solar new energy power, and discharge during the off-peak period of power generation. They can store electricity at any time and output electricity on demand. The power grid can use the peak-shaving and valley-filling capabilities of energy storage power stations to reduce the "abandonment" phenomenon caused by large new energy power generation or limited transmission capacity of local sections due to concentrated grid connection of new energy power generation, reduce the configuration capacity of conventional power sources during low valleys, and provide space for the development of new energy power sources. Ningxia Power Grid urgently needs to use the adjustment flexibility of grid-side energy storage power stations to make up for the intermittent and volatile nature of new energy power generation and promote flexible, safe and reliable operation of the power grid.

1.2 Overview of Demonstration Project

The grid-side energy storage power station is located in Guyuan City, close to the 330kV power grid enterprise substation. The project has an installed capacity of 100MW/200MWh. The energy storage system is a container-based integrated machine, consisting of an energy storage converter and booster integrated machine and an energy storage battery container. The energy storage unit is connected to the 110kV booster station after 35kV transformation, and is connected to the power grid enterprise substation with a 110kV line. The project uses lithium iron phosphate batteries, which have fast response, high output power accuracy, easy control, and flexible operation mode. It can meet the needs of various applications such as peak load regulation, frequency regulation, and emergency power support of the power system. The energy storage power station was connected to the grid on December 31, 2022.

1.3 Application Scenario Selection

During the 14th Five-Year Plan period, Guyuan City plans to build about 2,390MW of new energy installed capacity. It is expected that by 2025, the cumulative installed capacity of new energy in Guyuan City will exceed 3GW. With the gradual increase in wind and solar new energy installed capacity, the task of reducing the abandonment of solar and wind power is becoming more and more important. Taking into account the increasing proportion of new energy installed capacity in Ningxia and the project location, and combining the operating rules of the local power auxiliary service market in Ningxia, the application scenarios of this project are mainly selected as system peak regulation and power supply and demand time transfer, focusing on solving the problems of new energy power consumption and power system peak regulation, which can create favorable conditions for the continued development and utilization of new energy power generation in Guyuan City, and assist in participating in other scenarios such as active frequency regulation and reactive voltage regulation.

2. Analysis of price mechanism

As a new form of energy storage with new technology and new business model, the large-scale commercialization of grid-side energy storage power stations requires solving a series of systematic problems. Business models, cost sharing and recovery mechanisms are the core concerns of investors. Establishing a capacity electricity price mechanism for independent energy storage power stations on the grid side and gradually promoting energy storage power stations to participate in the electricity market[4] are the policy encouragement directions for forming a grid-side energy storage price mechanism. Therefore, this project attempts to establish a shared energy storage business model and participate in the market electricity price mechanism.

2.1 Capacity Price Mechanism

The formulation of the grid-side energy storage price mechanism mainly refers to the price mechanism of pumped storage. The government's guidance on the pumped storage price mechanism is: adhere to the two-part electricity price of capacity price and quantity price, the capacity price compensates for other costs other than peak-shaving costs and earns a reasonable profit, and the quantity price compensates for the operating costs of peak-shaving, mainly based on government pricing, and gradually pushes it to the market. Due to the large scale and wide service scope of pumped storage, there are still many difficulties in the specific operation, such as determining the price verification parameters, the verification procedures, and the electricity price cost sharing mechanism. Compared with pumped storage power stations, grid-side energy storage power stations mainly based on batteries have fewer restrictions during construction and flexible layout, making it easier to form a price mechanism through the market.