Modeling Financial Feasibility of Energy Storage Technologies for Grid Integration and Optimization

• Author(s): Ajibola Joshua Ajayi ; Oluwole Oluwadamilola Agbede ; Experience Efeosa Akhigbe ; Nnaemeka Stanley Egbuhuzor
• Paper ID: 1707091
• Page: 381-406
• Published Date: 31-03-2024
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 7 Issue 9 March-2024

Abstract

The growing integration of renewable energy sources into power grids has heightened the demand for efficient energy storage technologies to address intermittency and improve grid stability. This paper explores the financial feasibility of energy storage technologies, focusing on their potential for grid integration and optimization. By leveraging advanced modeling techniques, the study evaluates the cost-effectiveness, economic benefits, and scalability of various storage solutions, including lithium-ion batteries, pumped hydro storage, and emerging technologies such as flow batteries and compressed air energy storage. Financial modeling frameworks are employed to assess key parameters such as capital expenditure, operational costs, energy storage capacity, lifespan, and market demand. These models incorporate techno-economic analysis to evaluate the levelized cost of storage (LCOS) and return on investment (ROI) across different energy storage systems. The study also investigates the role of storage technologies in enhancing grid performance through load balancing, peak shaving, and frequency regulation, quantifying their impact on reducing grid operating costs and mitigating the variability of renewable energy inputs. This research highlights the importance of policy incentives and market mechanisms, such as capacity payments and ancillary service revenues, in improving the financial viability of energy storage projects. Additionally, sensitivity analyses are conducted to account for uncertainties in market prices, technological advancements, and regulatory changes, providing a robust decision-support framework for stakeholders. Despite the promising potential of energy storage technologies, challenges remain, including high initial capital costs, regulatory hurdles, and the need for large-scale deployment to achieve economies of scale. The paper proposes strategic recommendations, including enhanced financial modeling tools, interdisciplinary collaboration, and supportive regulatory frameworks, to accelerate the adoption of energy storage systems in grid integration. The findings underscore the critical role of energy storage in advancing renewable energy adoption, ensuring grid reliability, and achieving long-term energy sustainability. By optimizing financial modeling approaches, stakeholders can make informed investment decisions and drive the transition to a cleaner and more resilient energy future.

Keywords

Energy Storage, Financial Modeling, Grid Integration, Renewable Energy, Levelized Cost Of Storage (LCOS), Techno-Economic Analysis, Lithium-Ion Batteries, Grid Optimization, Policy Incentives, Peak Shaving, Frequency Regulation.

Citations

IRE Journals:
Ajibola Joshua Ajayi , Oluwole Oluwadamilola Agbede , Experience Efeosa Akhigbe , Nnaemeka Stanley Egbuhuzor "Modeling Financial Feasibility of Energy Storage Technologies for Grid Integration and Optimization" Iconic Research And Engineering Journals Volume 7 Issue 9 2024 Page 381-406

IEEE:
Ajibola Joshua Ajayi , Oluwole Oluwadamilola Agbede , Experience Efeosa Akhigbe , Nnaemeka Stanley Egbuhuzor "Modeling Financial Feasibility of Energy Storage Technologies for Grid Integration and Optimization" Iconic Research And Engineering Journals, 7(9)