The economics of energy storage: Location and sizing of power systems

What is it about?

Wind and solar energy offer solutions to the energy crisis and climate change. But these sources of energy vary depending on the time of day and season. This leads to fluctuations in their price, which can discourage people from adopting it. One way to overcome this problem is through energy storage. In this study, researchers came up with three indicators for the optimal sizing of energy storage for power systems. The first is the generation power-to-storage day ratio. This shows how many times lower the cost of unit storage has to be than the cost of unit power generation to ensure there is no change in the overall system cost. The next indicator is the photovoltaic-to-wind energy ratio, which shows if it is more profitable to use photovoltaic (i.e. solar) energy or wind energy at a particular location. The final indicator is called the reliability improvement indicator, which illustrates the cost of increasing the availability of energy from 95% of the time to 98%.

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Photo by Raychel Sanner on Unsplash

Photo by Raychel Sanner on Unsplash

Why is it important?

These indicators can be universally applied to see if a wind or solar power system is economically viable at a given place. The research also takes into account how wind and solar energy vary during the day and shows how that can affect the size of energy storage required. Understanding the economics behind these systems with storage will show how to ensure uninterrupted, fixed-cost wind or solar power. This will lead to more widespread adoption of renewable energy. KEY TAKEAWAY: This study shows how to find out the wind and solar energy potential of a location based on energy demands and energy storage demands. It also shows how to apply such indicators across different geographical regions. This will allow people to better estimate the economic viability of wind and solar energy systems.