Economic cost-benefit analysis for power system operations with environmental considerations

This paper presents a model aimed at evaluating the effects of integrating Renewable Energy Sources (RES) in the electricity system, from the perspective of a system operator, taking into account the cost of Carbon Dioxide (C02) emissions. The model is especially suited to analyze the interactions of energy storage systems (ESS) with conventional generation sources, in the framework of reliable operation (n − 1). One of the most important consequences of high levels of RES in the network is the variability induced on the existing generation fleet, and the wear-and-tear derived from ramping conventional units to counteract the changes in RES output. Our Security-Constrained Optimal Power Flow (SC-OPF) optimizes the injection into the network, including the cost of changes between periods for a given horizon. The results show that the main benefits derived from ESS are the reduction in the provision of ancillary services from conventional generation sources. These services are instead provided by ESS units. This is an important additional revenue stream for storage system owners, especially in the face of the cost of capital of these resources.