Wednesday, May 29, 2024

New financial tool helps assess storage costs with higher renewable energy contribution

As more renewable generation from such sources as wind, solar, and hydro enters the grid, the effectiveness of these technologies will increasingly rely on the development of long-duration energy storage solutions that support variability in electric power generation. Researchers at the National Renewable Energy Laboratory (NREL) have developed a Storage Financial Analysis Scenario Tool (StoreFAST) model to evaluate the levelized cost of energy (LCOE), also known as the levelized cost of storage (LCOS). This model can identify potential long-duration storage opportunities in the framework of a future electric grid with 85 percent renewables penetration. Researchers designed StoreFAST based on the successful Hydrogen Financial Analysis Scenario Tool (H2FAST), which was created by NREL in 2015 as a convenient aid for analysing the financial aspects of installing hydrogen fueling stations. “The H2FAST model is very flexible,” said Michael Penev, an infrastructure systems analyst at NREL. “There is nothing inherently specific to its use for hydrogen. For example, we have used this framework for analyzing the cost of long-haul trucking, ammonia production, electric vehicle charging, and more. StoreFAST targets this analysis toward energy storage to calculate the efficiency of different systems.” StoreFAST is a unique techno-economic tool in that it assesses energy storage systems and flexible power generation systems on a side-by-side basis. The model outputs visuals for three parameters: the LCOE, financial performance parameters, and time series charts for all financial line items. Primary inputs to the model include system power output capacity, capital costs, operations and maintenance (O&M) costs, charging electricity or fuel costs, storage duration, and capacity factors. StoreFAST offers a consistent comparison across all technologies by analysing key parameters describing system cost, performance, and capacity factor to calculate the net present value of all capital, operating, tax, and financing expenses divided by the system lifetime electricity sales. This definition of LCOE offers a consistent comparison of storage technologies. The study found that for long durations of energy storage (e.g., more than 60 hours), clean hydrogen systems with geologic storage and natural gas with carbon capture and sequestration are the lowest-cost options, regardless of whether system costs are based on current or future technology. Researchers also modelled the cost of an innovative energy storage system using fuel cells designed for heavy-duty vehicles rather than conventional stationary fuel cells, and found that this system achieved 13–20% lower LCOE.

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