Current and Future Energy Storage Market Revenues Sensitivity Study

The transition to variable renewable energy requires new approaches to provide grid reliability. Energy storage can contribute to reliability but it operates as both generation and load, so market revenues for energy storage are more complicated to estimate than traditional resources. Models such as the System Advisor Model and the Distributed Energy Resources Value Estimation Tool (DER-VET) can clarify the potential revenue by optimizing dispatch to maximize profit. This study uses EPRI's DER-VET to perform sensitivity analyses assessing the impact that varying duration has on energy storage profitability in the context of electricity price forecasts from a Michigan-based utility company for lithium-ion batteries, vanadium flow batteries, hydrogen storage, and compressed air energy storage. The study found that long duration energy storage technologies can reach positive net present values (NPV), but market structures need to adapt to value longer duration storage.