Economic Evaluation of Grid-side Energy Storage Trading on Multiple Electricity Markets

The rapid growth of renewable installation poses new challenges to the stability of power grids. Energy storage is a promising technology to reduce the impact of high renewable penetration. Grid operators are investing in more storage facilities to enhance the reliability of their power grids. The profitability of energy storage projects is vital to capital recovery. Some believed grid operators as the system operator has already charged fees for providing stable and reliable transmission services, and they should not gain profits from electricity markets. China has decided to allow grid-owned energy storage to engage in market trade. This movement opens up another question about how to efficiently run these storage systems and benefit from market trade. This paper performs a cost-benefit analysis for grid energy storage when participating in electricity markets in China.