How Does Energy Storage Increase the Efficiency of an Electricity Market with Integrated Wind and Solar Power Generation?—A Case Study of Korea

In recent years, increasing requests to reduce greenhouse gas emissions have led to renewable resources rapidly replacing conventional power sources. However, the inherent variability of renewable sources reduces the reliability of power systems. Energy storage has been proposed as a viable alternative, as it can mitigate the variability of renewable energy sources and increase the efficiency of power systems by lowering peak electricity demand. In this study, we evaluate the benefits of integrating energy storage with combined wind and solar power generation in the Korean power system through using the dynamic optimization method. Realistic wind and photovoltaic solar power generation scenarios were estimated for actual sites. The results show that the wind power-based system benefitted more from energy storage than the combined wind and solar photovoltaic power-based system. This is because the high variability of wind power was reduced when it was combined with solar power. Co-optimization for energy and reserve costs was more beneficial than optimization for energy costs alone, which suggests that the reliability offered by storage is an important cost-saving factor, in addition to the reduction of energy costs by price arbitrage. Finally, the analysis was conducted under various scenarios to determine the validity of energy storage cost effectiveness.