Financial Benefits of BESS for Frequency Regulation
Using Battery Energy Storage Systems (BESS) for frequency regulation offers several financial benefits:
- Revenue through Frequency Regulation Services:
- BESS can earn revenue by participating in frequency regulation markets. This involves providing capacity to either increase or decrease power output in response to grid frequency fluctuations.
- In regions like MISO (Midcontinent Independent System Operator), batteries can earn substantial revenues by providing frequency regulation services, with historical prices averaging around $9.83 per hour but occasionally spiking much higher during critical periods.
- Reduced Fatigue Loss in Thermal Power Plants:
- By absorbing fluctuations in power output, BESS can reduce the fatigue on equipment in thermal power plants. This reduces maintenance costs and extends the lifespan of the equipment.
- Energy Arbitrage Opportunities:
- While not specific to frequency regulation, BESS can store energy when prices are low and sell it when prices are high. This approach can generate additional revenue streams and enhance the financial feasibility of renewable projects.
- Enhanced Grid Stability and Efficiency:
- By providing rapid response capabilities during frequency imbalances, BESS helps maintain grid stability. This can prevent costly power outages and reduce losses due to frequency deviations.
- Potential for Additional Revenue Streams:
- In some markets, batteries can participate in capacity auctions, which can further increase their revenue potential. For instance, a battery system in Illinois might earn additional revenue from capacity auctions compared to other regions.
- Long-term Cost Savings:
- The use of BESS for frequency regulation can lead to efficient operation strategies that minimize energy waste and optimize the system’s state of charge, contributing to long-term cost savings and increased profitability.
In summary, incorporating BESS into frequency regulation not only provides direct revenue through service provision but also offers indirect benefits by improving the efficiency and reliability of the power grid.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-financial-benefits-of-using-bess-for-frequency-regulation/
