Battery Storage Subsidy; Internal Rate of Re-turn (IRR); Multi-Objective Optimisation; Photovoltaic Systems; Renewable Energy
Abstract :
[en] Decarbonization efforts aimed at tackling the cli-mate change issues rely on increasing use of renewable energy sources (RES) in the power system. In order to maximise their integration, significantly higher rollout of the battery storage systems (BSS) is necessary, even in the EU which set ambitious goal of achieving carbon neutrality by 2050. EU goals will be difficult to realize without incentives to battery storage. In this paper direct subsidies reducing the installation cost of BSS are considered. We use German power market data for the 2017 and 2021: intraday prices, day-ahead prices and primary reserve markets in particular. Battery storage is integrated with photovoltaics (PV) in order to provide electricity to small and medium sized industrial plants. In this setup the multi- objective optimisation (MOO) method to optimise the annual BSS operation is applied and internal rate of return is used to assess profitability. Since the BSS cycle lifetime (determined by market conditions) often exceeds the calendar lifetime, a fall in the profitability occurs which is used to calculate the subsidy level. The results suggest that the obtained subsidy range is within the range reported in practice considering the perfect foresight assumption used in the analysis. Also, lower subsidies are obtained for 2021 due to conditions more favourable for BSS operation.
Research center :
Interdisciplinary Centre for Security, Reliability and Trust (SnT) > FINATRAX - Digital Financial Services and Cross-organizational Digital Transformations
Disciplines :
Management information systems Electrical & electronics engineering Computer science
Author, co-author :
Jurčević, Jura; University of Zagreb, Faculty of Economics and Business, Department of Managerial Economics, Zagreb, Croatia
Zoričić, Davor; University of Zagreb, Faculty of Economics and Business, Department of Managerial Economics, Zagreb, Croatia
Dolinar, Denis; University of Zagreb, Faculty of Economics and Business, Department of Managerial Economics, Zagreb, Croatia
PAVIĆ, Ivan ; University of Luxembourg > Interdisciplinary Centre for Security, Reliability and Trust (SNT) > FINATRAX
Čović, Nikolina; University of Zagreb, Faculty of Electrical Engineering and Computing, Department of Energy and Power Systems, Zagreb, Croatia
External co-authors :
yes
Language :
English
Title :
Determining the minimal Battery Storage System subsidy: The Internal Rate of Return-based optimisation approach
Original title :
[en] Determining the minimal Battery Storage System subsidy: The Internal Rate of Return-based optimisation approach
Publication date :
November 2022
Event name :
2022 International Conference on Electrical, Computer, Communications and Mechatronics Engineering (ICECCME)
Event organizer :
IEEE
Event date :
16.11.2022. - 18.11.2022
By request :
Yes
Audience :
International
Main work title :
International Conference on Electrical, Computer, Communications and Mechatronics Engineering, ICECCME 2022
Publisher :
Institute of Electrical and Electronics Engineers Inc.
This work was funded by the European Union through the European Regional Development Fund’s Operational Programme Competitiveness and Cohesion 2014-2020 of the Republic of Croatia under project KK.01.1.1.04.0034 “Connected Stationary Battery Energy Storage“.This work was funded by the European Union through the European Regional Development Fund’s Operational Programme Competitiveness and Cohesion 2014-2020 of the Republic of Croatia under project KK.01.1.1.04.0034 “Connected Stationary Battery Energy Storage“.
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