Economics of energy storage options to support a conventional power plant: A stochastic approach for optimal energy storage sizing

•A model is proposed for optimal sizing of a storage system beside a power plant.•Number of payback cycles is proposed to assess the economics of storage systems.•Energy storage systems increase flexibility of conventional power plants.•Using of storage improves operational and economic benefits of conventional units.•Storage system increases the bilateral contracts profits of the generation units. Is an energy storage system (ESS) an economic choice to enhance the flexibility and controllability of a conventional power plant (CPP)? So far, most literatures have investigated the profitability of ESSs beside renewable power plants (RESs). The focus of this paper is on economic assessment of an ESS alongside a CPP in a price taker generation company (GENCO). This work presents a method to determine economic storage technology options and their optimal power and energy capacities. A stochastic price based unit commitment (PBUC) conjugated with a stochastic price based storage commitment (PBSC) is developed in the ESS sizing problem. The output determines the optimal participation of a power plant and its optimum sized ESS in day-ahead energy and spinning reserve markets and bilateral contracts. Numerical results confirm the capability of the proposed model to improve the operational characteristics of the CPPs and to increase the profitability of GENCOs. The results show that the ESS increases the GENCOs' profit by up to 36%. The ESS, using the proposed model, can reduce the number of on line hours of the CPP about 13%. Also, the GENCO can offer about 10% lower price for bilateral contracts.