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Does it reasonable to include grid-side energy storage costs in transmission and distribution tariffs? Benefit
Shanshan Huang1, Ze Ye1, Yunxiang Huang2
1The School of Economics and Management, Changsha University of Science and Technology, Changsha, 410076, China.
Abstract:
Grid-side energy storage has become a crucial part of contemporary power systems as a result of the rapid expansion of renewable energy sources and the rising demand for grid stability. This study aims to investigate the rationality of incorporating grid-side energy storage costs into transmission and distribution (T&D) tariffs, evaluating this approach using economic externality theory. We first develop a comprehensive benefit evaluation framework based on economic externality theory considering system stability, renewable energy integration, end-user, and environmental impacts. Then, using the CPLEX solver, an operating model of grid-side energy storage is constructed with the goal of reducing substation load variations. Through a case study, it is found that grid-side energy storage has significant positive externality benefits, validating the rationale for including grid-side energy storage costs in T&D tariffs. Sensitivity analysis suggests that with cost reduction and market development, the proportion of grid-side energy storage included in the T&D tariff should gradually recede. As a result, this study offers important information about whether it is reasonable to include grid-side energy storage costs in T&D tariffs in China.
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