New Power System Energy Storage Cost Compensation Mechanism

The rapid development of new energy(NE) sources has brought us new economic growth opportunities. In order to improve the economics of power system operation, various types of power generation must be compensated. The cost compensation mechanism of energy storage (ES) technology is one of the important issues facing the current power system and is directly related to the promotion and application of NE. The core issue of the ES cost compensation mechanism is how to balance the return on investment of ES technology and the supply and demand(SD) relationship in the power market. At present, ES technology is mainly used in renewable energy fields, such as wind energy, solar energy, etc. These areas are characterized by instability in power supply and uncertainty in demand, resulting in SD imbalances in the power market. Therefore, this article will study the ES cost compensation mechanism of new power systems. Through the analysis of the power ES system and the discussion of ES technology, a cost compensation mechanism is proposed. From the three aspects of the compensation mechanism, the advantages are analyzed and the key points are discussed. Subsequently, through data investigation, a scale analysis of China’s current new power system was conducted, and the economics of pumped hydro storage, lithium-ion batteries and compressed air energy storage(CAES) were compared. Survey data shows that hydropower generation capacity is 1.35 trillion kilowatt hours, which is 15.3% of the total power generation capacity.