Abstract
The need for a high ramping energy resource for frequency regula-
tion is increasing due to the high penetration of intermittent and
variable renewable energy sources, such as wind and solar, in the
electricity grid. Traditionally, special generators have been used
for frequency regulation. These generators can provide high ca-
pacity but have a very slow response time. Battery energy storage
(BES) has gotten tremendous attention due to the advancement
in technology. BES has a very fast response time, which makes
it suitable for frequency regulation. In this paper, we perform an
economic analysis of a distributed energy storage participating in
the PJM and NYISO regulation markets. The distributed storage
consists of many small consumers' installed batteries. A centralized
entity at a microgrid level controls the distributed storage using our
proposed algorithms. The economic analysis is performed from the
perspective of individual storage owners. Our results show that the
five-year net-present-value (NPV) of the consumers' investment is
positive if the utility shares 30% (or above) of the regulation revenue
with the storage owners and keeps the rest of the 70%.