Economics of adding thermal energy storage
Thermal energy storage (TES) increases capital cost but often greatly improves project value by enabling dispatchable power and higher capacity factors. The economic impact depends on storage duration, system efficiency, and market structure.
Economic effects of storage:
- Increased revenue potential: stored energy can be sold during higher-priced evening hours or when grid demand peaks.
- Higher capital cost: tanks, insulation, and heat exchangers add to the upfront investment.
- Improved capacity factor: more usable energy per unit of installed collector capacity spreads fixed costs over more output.
Financial considerations:
- Value of dispatchability: markets that reward firm, dispatchable power increase the value of storage-equipped CSP plants.
- Payback period: depends on differential pricing between daytime and peak periods and on storage round-trip efficiency.
- Risk reduction: storage provides hedge against DNI variability and can meet contractual delivery obligations.
In many markets, TES is a strategic investment that transforms intermittent solar collection into a reliable power product, improving long-term returns despite higher capital expenditures.