System Value Assessment and Heterogeneous Cost Allocation of Long-Duration Energy Storage Systems: A Public Asset Perspective

Long-duration energy storage (LDES) can deliver system-wide flexibility and decarbonization benefits, yet investment is often hindered because these benefits are diffuse and not fully monetized under conventional market structures. A public-asset-oriented valuation and cost-allocation framework is proposed for LDES. First, LDES externality benefits are quantified through a system-level optimization-based simulation on a stylized aggregated regional network, with key indicators including thermal generation cost, carbon penalty, renewable curtailment cost, involuntary load shedding, and end-user electricity expenditures. Second, LDES investment costs are allocated among thermal generators, renewable operators, grid entities, and end users via a benefit-based Nash bargaining mechanism. In the case study, introducing LDES reduces thermal generation cost by 3.92%, carbon penalties by 5.59%, and renewable curtailment expenditures by 7.07%, while eliminating load shedding. The resulting cost shares are 46.9% (renewables), 28.7% (end users), 22.4% (thermal generation), and 0.5% (grid entity), consistent with stakeholder-specific benefit distributions. Sensitivity analyses across storage capacity and placement further show diminishing marginal returns beyond near-optimal sizing and systematic shifts in cost responsibility as benefit patterns change. Overall, this framework offers a scalable, economically efficient, and equitable strategy for cost redistribution, supporting accelerated LDES adoption in future low-carbon power systems.