4 FAQs about New energy storage pricing mechanism

Why do energy storage facilities need a dynamic pricing mechanism?

This dynamic pricing mechanism ensures that energy storage facilities derive greater revenues from the market, thereby enhancing their economic viability. Additionally, this flexibility aligns with the rapid technological evolution of the energy storage sector, supporting its sustainable growth.

Do market-based pricing mechanisms dominate energy storage valuation?

Market-based pricing mechanisms dominate energy storage valuation. For example, the Federal Energy Regulatory Commission (FERC) has implemented a series of regulations, such as Order 841, enabling energy storage systems to participate in various service markets and accrue corresponding benefits (Sakti et al., 2018).

How do energy storage operators make decisions?

Energy storage operators act as followers, making decisions regarding storage capacity and operational strategies based on the tariffs set by the grid. Their decision-making process incorporates historical capacity tariffs, operating costs, expected returns, and market dynamics.

Can a capacity tariff optimization model save the energy storage system cost?

If we do not consider the Stackelberg game mechanism, the capacity tariff of the energy storage plant is calculated as 584.76 CNY/MW according to the traditional method, which shows that the capacity tariff optimization model of the grid energy storage plant proposed in this paper can save the system cost.

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