Energy storage represents one of the key enabling technologies to facilitate an efficient system integration of intermittent renewable generation and electrified transport and heating demand. This paper presents a novel whole-systems approach to valuing the contribution of grid-scale electricity storage. This approach simultaneously optimizes investment into new generation, network and storage capacity, while minimising system operation cost, and also considering reserve and security requirements. Case studies on the system of Great Britain (GB) with high share of renewable generation demonstrate that energy storage can simultaneously bring benefits to several sectors, including generation, transmission and distribution, while supporting real-time system balancing. The analysis distinguishes between bulk and distributed storage applications, while also considering the competition against other technologies, such as flexible generation, interconnection and demand-side response.

Realizing the significant demand flexibility potential in deregulated power systems requires its suitable integration in electricity markets. Part I of this work has presented the theoretical, algorithmic and implementation aspects of a novel pool market mechanism achieving this goal by combining the advantages of centralized mechanisms and dynamic pricing schemes, based on Lagrangian relaxation (LR) principles. Part II demonstrates the applicability of the mechanism, considering two reschedulable demand technologies with significant potential, namely electric vehicles with flexible charging capability and electric heat pump systems accompanied by heat storage for space heating. The price response sub-problems of these technologies are formulated, including detailed models of their operational properties. Suitable case studies on a model of the U.K. system are examined in order to validate the properties of the proposed mechanism and illustrate and analyze the benefits associated with the market participation of the considered technologies.

Increase of penetration of intermittent renewable power connected to the system will increase the requirements for frequency regulation services. If these services are met by conventional plant running part-loaded, this will not only reduce the system operational efficiency but will also limit the ability of the system to accommodate renewable generation. This work quantifies the value of Dynamic Demand (DD) concept, which enables domestic refrigeration appliances to contribute to primary frequency regulation through an advanced stochastic control algorithm. The benefits of DD providing frequency response are determined for a wide range of future low-carbon generation systems, using an efficient generation scheduling model which includes scheduling of frequency regulation and reserve services. The analysis also considers the potential impact of wind generation on system inertia and primary frequency regulation. Simulations indicate that the benefits of DD increase considerably in systems with high wind penetration, making DD an attractive option for significantly improving system efficiency.

Any Cost-effective transition toward low-carbon electricity supply will necessitate improved system flexibility to address the challenges of increased balancing requirements and degradation in asset use. Energy storage (ES) represents a flexible option that can bring significant, fundamental economic benefits to various areas in the electric power sector, including reduced investment requirements for generation, transmission, and distribution infrastructure as well as reduced system operation and balancing costs. The additional flexibility offered by ES could also significantly reduce the requirement for investment in low-carbon generation capacity while achieving the established carbon intensity targets. Moreover, ES may present significant option value, as it can provide flexibility for dealing with uncertainty in future system development.