Cost Benefit Analysis of Compressed Air Energy Storage
In this project, we performed a comprehensive cost-benefit analysis of hydrogen-fuelled compressed air energy strage in the future Dutch and Danish electricity systems.
Energy Reform and Corre Energy have partnered together to successfully demonstrate the full value of new and existing storage technologies since 2011. Energy Reform has applied their Epiphron stochastic co-optimised investment planning and production cost model to assess the full range of benefits of flexible storage technologies which has resulted in over €200m of grant funding and investment.
This work has involved development and application of state-of-the-art modelling methodologies in order to capture the full value of flexibility and long-term storage. This work, over many years, has led to deep insights regarding appropriate modelling of the system in order to capture the necessary requirements for system flexibility. A comprehensive set of modelling studies has been carried out to assess the full system value of various storage technologies in Ireland, Denmark and the Netherlands.
Using rolling planning with forecast error, the value of storage in day-ahead markets has been accurately captured in addition to the value across intraday, balancing and ancillary services provision. This required a very sophisticated statistical assessment of historical forecast error to characterise future statistical distributions of likely forecast error and generate forecasts with errors that match historically observed distributions. To calculate socio-economic welfare, Epiphron was deployed as a fully stochastic model where the optimisation problem is formulated as a stochastic program, thus capturing the impact of uncertainty on the system. In addition, the capacity value of storage was assessed. These studies have been extensively validated and interrogated by third parties as part of numerous due diligence processes. Additionally, the work has been validated by the European Commission and their advisors and the detailed results accepted as part of the PCI grant award process.