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Innovative Energy Islands: Life-Cycle Cost-Benefit Analysis for Battery Energy Storage

Author

Listed:
  • Xin Li

    (Norwich Business School, University of East Anglia, Norwich NR4 7TJ, UK
    Tyndall Centre for Climate Change Research, University of East Anglia, Norwich NR4 7TJ, UK)

  • Konstantinos J. Chalvatzis

    (Norwich Business School, University of East Anglia, Norwich NR4 7TJ, UK
    Tyndall Centre for Climate Change Research, University of East Anglia, Norwich NR4 7TJ, UK)

  • Phedeas Stephanides

    (Norwich Business School, University of East Anglia, Norwich NR4 7TJ, UK
    Tyndall Centre for Climate Change Research, University of East Anglia, Norwich NR4 7TJ, UK)

Abstract
Cities are concentrations of economic, social, and technical assets, which are fundamental to addressing climate change challenges. Renewable energy sources are growing fast in cities to mitigate greenhouse gas emissions in response to these challenges. In this transition urban decentralized energy shares technical and economic characteristics with energy islands. This is reflected in that island energy systems essentially operate off-grid which as a modus operandi can offer lessons to small-scale urban systems. With the expansion of urban areas, communities, especially small-scale ones, are sometimes further away from the main power infrastructure. Providing power supply to these communities would require significant investment to the existing power system, either to improve its grid infrastructure or power supply facilities. The energy islands have for some time now lent themselves to energy innovation including smart grid and battery storage applications. In this research we conceptualize that urban energy communities can be benefitted by knowledge transfer from energy islands in several fronts. We specifically put forward a life-cycle cost-benefit analysis model to evaluate the economics of battery storage system used in small communities from a life-cycle perspective. In this research we put forward a novel cost-benefit analysis model. Our results show that the inclusion of externalities can improve the economic value of battery systems significantly. Nevertheless, the economic performance is still largely dependent on several parameters, including capacity cost, discharging price, and charging cost. We conclude that existing electricity price structures (e.g., using household electricity price as a benchmark) struggle to guarantee sufficient economic returns except in very favorable circumstances; therefore, governmental support is deemed necessary.

Suggested Citation

  • Xin Li & Konstantinos J. Chalvatzis & Phedeas Stephanides, 2018. "Innovative Energy Islands: Life-Cycle Cost-Benefit Analysis for Battery Energy Storage," Sustainability, MDPI, vol. 10(10), pages 1-19, September.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3371-:d:171164
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    References listed on IDEAS

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    Cited by:

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    3. Lei Zhang & Yingqi Liu & Beibei Pang & Bingxiang Sun & Ari Kokko, 2020. "Second Use Value of China’s New Energy Vehicle Battery: A View Based on Multi-Scenario Simulation," Sustainability, MDPI, vol. 12(1), pages 1-25, January.
    4. Zhixian Wang & Ying Wang & Qia Ding & Chen Wang & Kaifeng Zhang, 2020. "Energy Storage Economic Analysis of Multi-Application Scenarios in an Electricity Market: A Case Study of China," Sustainability, MDPI, vol. 12(20), pages 1-17, October.
    5. Marcin Szott & Szymon Wermiński & Marcin Jarnut & Jacek Kaniewski & Grzegorz Benysek, 2021. "Battery Energy Storage System for Emergency Supply and Improved Reliability of Power Networks," Energies, MDPI, vol. 14(3), pages 1-21, January.
    6. Lai, Chun Sing & Locatelli, Giorgio, 2021. "Economic and financial appraisal of novel large-scale energy storage technologies," Energy, Elsevier, vol. 214(C).
    7. Weinand, Jann Michael & Scheller, Fabian & McKenna, Russell, 2020. "Reviewing energy system modelling of decentralized energy autonomy," Energy, Elsevier, vol. 203(C).
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    9. Amro M. Elshurafa & Mohammad H. Aldubyan, 2019. "State-of-Charge Effects on Standalone Solar-Storage Systems in Hot Climates: A Case Study in Saudi Arabia," Sustainability, MDPI, vol. 11(12), pages 1-19, June.
    10. Sulaiman A. Almohaimeed & Siddharth Suryanarayanan & Peter O’Neill, 2021. "Simulation Studies to Quantify the Impact of Demand Side Management on Environmental Footprint," Sustainability, MDPI, vol. 13(17), pages 1-24, August.
    11. Oluwasola O. Ademulegun & Patrick Keatley & Motasem Bani Mustafa & Neil J. Hewitt, 2020. "Energy Storage on a Distribution Network for Self-Consumption of Wind Energy and Market Value," Energies, MDPI, vol. 13(11), pages 1-17, May.
    12. Marko Jelić & Marko Batić & Nikola Tomašević & Andrew Barney & Heracles Polatidis & Tracey Crosbie & Dana Abi Ghanem & Michael Short & Gobind Pillai, 2020. "Towards Self-Sustainable Island Grids through Optimal Utilization of Renewable Energy Potential and Community Engagement," Energies, MDPI, vol. 13(13), pages 1-22, July.
    13. Lai, Chun Sing & Locatelli, Giorgio, 2021. "Valuing the option to prototype: A case study with Generation Integrated Energy Storage," Energy, Elsevier, vol. 217(C).
    14. Ioannidis, Alexis & Chalvatzis, Konstantinos J. & Li, Xin & Notton, Gilles & Stephanides, Phedeas, 2019. "The case for islands’ energy vulnerability: Electricity supply diversity in 44 global islands," Renewable Energy, Elsevier, vol. 143(C), pages 440-452.

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