A case study about the potential of battery storage in Culture house : Investigation on the economic viability of battery energy storage system with peak shaving & time-of-use application for culture house in Skellefteå.

University essay from Mälardalens högskola/Akademin för ekonomi, samhälle och teknik

Abstract: The energy demand is steadily increasing, and the electricity sector is undergoing a severe change in this decade. The primary drivers, such as the need to decarbonize the power industry and megatrends for more distributed and renewable systems, are resulting in revolutionary changes in our lifestyle and industry. The power grid cannot be easily or quickly be upgraded, as investment decisions, construction approvals, and payback time are the main factors to consider. Therefore, new technology, energy storage, tariff reform, and new business models are rapidly changing and challenging the conventional industry. In recent times, industrial peak shaving application has sparked an increased interest in battery energy storage system (BESS).  This work investigated BESS’s potential from peak shaving and Time-of-use (TOU) applications for a Culture-house in Skellefteå. Available literature provides the knowledge of various BESS applications, tariff systems, and how battery degradation functions. The predicted electrical load demand of the culture-house for 2019 is obtained from a consultant company Incoord. The linear optimization was implemented in MATLAB using optimproblem function to perform peak shaving and time-of-use application for the Culture-hose BESS. A cost-optimal charging/discharging strategy was derived through an optimization algorithm by analyzing the culture-house electrical demand and Skellefteå Kraft billing system. The decisional variable decides when to charge/discharge the battery for minimum battery degradation and electricity purchase charges from the grid.   Techno-economic viability is analyzed from BESS investment cost, peak-power tariff, battery lifespan, and batter aging perspective. Results indicate that the current BESS price and peak-power tariff of Skellefteå Kraft are not suitable for peak shaving. Electricity bill saving is too low to consider TOU application due to high battery degradation. However, combining peak shaving & TOU does generate more profit annually due to additional savings from the electricity bill. However, including TOU also leads to higher battery degradation, making it not currently a viable application. A future scenario suggests a decrease in investment cost, resulting in a shorter payback period.  The case study also analyses the potential in the second-life battery, where they are purchased at 80 % State of Health (SoH) for peak shaving application. Second-life batteries are assumed to last until 70 % or 60 % before End of Life (EOL). The benefit-cost ratio indicates that second-life batteries are an attractive investment if batteries can perform until 60% end of life, it would be an excellent investment from an economic and sustainability perspective. Future work suggests integrating more BESS applications into the model to make BESS an economically viable project.

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