Techno-economic analysis of battery storage systems and hydrogen-based storage systems as an alternative to grid expansion in the medium voltage grid in Germany

The decentralization of the energy system in Germany is leading to enormous investments in grid expansion, as the current regulation creates an obligation to expand the power grid to eliminate bottlenecks. Meanwhile, opportunities to leverage grid-friendly control of storage systems are neglected to alleviate the need for investment. For this reason, it is necessary to investigate intelligent alternatives to grid expansion, such as storage systems, to efficiently integrate distributed technologies into the power system and reduce the need for grid expansion. In this work, two representative configurations of a medium voltage grid in Germany are developed for the years 2022 and 2050, and different storage systems are compared economically with the grid expansion in a model-based simulation. Hydrogen storage and battery storage were chosen as storage systems. The results show that grid expansion is the least expensive option if only the grid expansion costs are included in the analysis. However, if additional uses for the storage systems are considered, the battery storage systems are more economical. While in the scenario for 2050 the grid expansion causes costs of approx. 56,000 EUR per year, revenues of at least 58,000 EUR per year can be achieved via the revenue opportunities of the battery storage, representing a 3.5% margin. Heat extraction, arbitrage trading, and avoidance of grid expansion in superimposed grid levels were integrated as additional revenue streams/sources. A robust data basis and cost degressions were assumed for the simulations to generate meaningful results. Overall, hydrogen storage systems are economically inferior to battery storage systems and grid expansion for this use case. The results demonstrate the complexity of analyzing the trade-offs in terms of storage as an alternative to grid expansion as well as the opportunities presented using battery storage instead.