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MARIANO GIUSEPPE IPPOLITO

Economic feasibility of a customer-side energy storage in the Italian electricity market

  • Authors: Ippolito, M.; Favuzza, S.; RIVA SANSEVERINO, E.; Telaretti, E.; Zizzo, G.
  • Publication year: 2015
  • Type: Contributo in atti di convegno pubblicato in volume
  • OA Link: http://hdl.handle.net/10447/153387

Abstract

Electricity prices show significant short-term variations during the day due to the need of balancing supply and demand in real time. Normally, customers are not exposed to these variations but pay a constant electricity price. In an attempt to reduce the volatility of the wholesale prices, several utilities are moving from conventional fixed-rate pricing schemes to new market-based models, where the electricity price can fluctuate during the day depending on the market conditions. Examples of time-dependent pricing schemes are Time-Of-Use (TOU) tariffs, where the electricity price can take two or three price levels during the day, or Real-Time Pricing (RTP) tariffs, where the energy price can vary hourly depending on the wholesale market. Electricity customers can thus take profit from the installation of storage technologies, storing electricity when the price is low and reselling it back to the grid during peak hours, at a significantly higher price. In this paper, a sodium-sulfur (NaS) battery is considered to be added to a medium-scale public facility, in order to reduce the electricity bill. The storage is operated exploiting a simple strategy (charging during off-peak, discharging during on-peak prices) with the aim of maximizing the saving for the end-user. The economic viability of using the storage is evaluated and discussed, referring both to the hourly national prices and to the zonal electricity prices of the Italian energy market. The results show that the payback period (PBP) is greater than the battery life when the customer prices are assumed proportional to the single national prices. The situation could change in the near future, thanks to the cost reduction of storage technologies expected in coming years.