Economic analysis of cost-based load shifting implementation on large utility systems using battery energy storage system

Abstract

Advances in energy storage technology have allowed the application of load shifting in the utility grid for a more efficient power system operation. However, the economy of the Battery Energy Storage System (BESS) application is not linear to the cost reduction obtained from excluding the costly generators. This paper presents the economic analysis of cost-based load shifting implementation and an approach to determine the generation units to be deactivated and replaced by BESS on three large-scale power grids in Indonesia: Sumbagut, Sumbagteng, and Sumbagsel systems. The economic feasibility is evaluated using the Net Present Value (NPV), considering the savings and the BESS investment cost. The result shows that the proposed approach is more robust than the conventional methods, such as removing the most expensive units, units with the highest cost reduction, units with the best economic return contribution, or the maximum number of units that can be replaced.